TikTok signs joint venture deal to end U.S. ban threat

TikTok said Thursday it has signed a joint venture deal with investors that would allow the company to maintain operations in the United States and avoid a ban threat over its Chinese ownership.

According to an internal memo seen by AFP, TikTok CEO Shou Chew told employees that the social media company and its Chinese owner ByteDance had agreed to the new entity, with Oracle, Silver Lake and Abu Dhabi-based MGX on board as major investors.

Oracle's executive chairman and founder Larry Ellison is a longtime ally of U.S. President Donald Trump.

"The U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance," Chew said in the memo.

"It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure."

Chew told staff that half the U.S. venture will be held by a consortium of new investors including Oracle, Silver Lake and MGX - which will have 15 percent each.

Affiliates of existing ByteDance investors will own a touch over 30 percent of the venture, with Bytedance retaining just shy of 20 percent - the maximum ownership allowed to a Chinese company under the terms of the law.

TikTok Global's U.S. entities will manage global product interoperability, and certain commercial activities, including e-commerce, advertising, and marketing, according to the memo. 

Chew noted that there is more work to be done ahead of the January 22 closing date for the deal.