The TikTok deal is done, and Donald Trump is claiming a win, although it remains unclear if the joint venture he arranged with ByteDance and the Chinese government actually resolves Congress’ national security concerns.
In a press release Thursday, TikTok announced the “TikTok USDS Joint Venture LLC,” an entity established to keep TikTok operating in the US.
Giving Americans majority ownership, ByteDance retains 19.9 percent of the joint venture, the release said, which has been valued at $14 billion. Three managing investors—Silver Lake, Oracle, and MGX—each hold 15 percent, while other investors, including Dell Technologies CEO Michael Dell’s investment firm, Dell Family Office, hold smaller, undisclosed stakes.
Americans will also have majority control over the joint venture’s seven-member board. TikTok CEO Shou Chew holds ByteDance’s only seat. Finalizing the deal was a “great move,” Chew told TikTok employees in an internal memo, The New York Times reported.
Two former TikTok employees will lead the joint venture. Adam Presser, who previously served as TikTok’s global head of Operations and Trust & Safety, has been named CEO. And Kim Farrell, TikTok’s former global head of Business Operations Protection, will serve as chief security officer.
Trump has claimed the deal meets requirements for “qualified divestiture” to avoid a TikTok ban otherwise required under the Protecting Americans from Foreign Adversary Controlled Applications Act. However, questions remain, as lawmakers have not yet analyzed the terms of the deal to determine whether that’s true.
The law requires the divestment “to end any ‘operational relationship’ between ByteDance and TikTok in the United States,” critics told the NYT. That could be a problem, since TikTok’s release makes it clear that ByteDance will maintain some control over the TikTok US app’s operations.
For example, while the US owners will retrain the algorithm and manage data security, ByteDance owns the algorithm and “will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing.” The Trump administration seemingly agreed to these terms to ensure that the US TikTok isn’t cut off from the rest of the world on the app.
Source: arstechnica.com
