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TikTok’s deal to sell its US business is entering its final stages, and could wrap up by Jan. 22.
TikTok CEO Shou Chew sent an internal memo on December 18 to employees outlining the company's next steps. The note, seen by The Hollywood Reporter and Reuters, explains how a joint venture between three companies will help TikTok avoid a long-delayed ban in the US.
The memo confirms that a new consortium of investors plans to take a 50% stake in the US business under the name TikTok USDS Joint Venture LLC. Oracle, Silver Lake, and Abu Dhabi’s state-owned investment firm MGX each plan to take 15%, with the remaining 5% taken by other unnamed investors.
A selection of what Chew calls "affiliates of certain existing investors of ByteDance” will take 30.1%. The final 19.9% will be retained by ByteDance. The financial details of the deal are undisclosed.
TikTok briefly went dark in January due to a law requiring ByteDance to divest its ownership of its US business. It returned when incoming President Donald Trump promised not to go after US app stores that hosted the app while a deal was worked out. A ban was delayed multiple times, despite the law only giving the president a 90-day reprieve, calling into question whether TikTok was indeed a major national security threat.
Chew confirms that the new joint venture will assume control of the algorithm used to recommend TikTok videos to US users. Investors will oversee “retraining the content recommendation algorithm on US user data to ensure the content feed is free from outside manipulation," he says.
It's unclear if that will have an immediate impact on your TikTok experience. It's likely to be a slow process, as the new owners won't want to risk an algorithm reset that would alienate users.
Chew says the joint venture will also be “reviewing and approving all content moderation and related policies.” It will also be in control of user data in a "secure cloud environment in the United States run by Oracle."
Investors will be in control of "deployment and integrity" of software used by TikTok. Previous rumors suggested you may need to download a new app to access a new version of TikTok after the deal is complete, but that has yet to be confirmed by ByteDance.