TikTok reorganizes into a U.S. joint venture, adjusting its Algorithm to strengthen citizen protection and national security.

After years of political struggles and national security controversies, the future of the short video platform TikTok in the United States has finally been settled. According to a report by the Associated Press, TikTok has signed a legally binding agreement with Oracle, Silver Lake, and the Mubadala Investment Company of the United Arab Emirates to establish a new TikTok U.S. joint venture by selling a portion of its shares, ensuring that the platform can continue to operate in the United States. Notably, the restructured TikTok will set up a new board of directors consisting of seven members, most of whom are U.S. citizens, to fulfill commitments to protect the personal data of American citizens and national security; at the same time, the core video recommendation Algorithm of the platform will also be readjusted to ensure that content delivery is not manipulated by any external forces.

TikTok CEO Zhou Shouzi issued a memo to employees confirming the protocol.

The Associated Press has obtained an internal memorandum indicating that the transaction is expected to be completed on January 22. TikTok CEO Shou Zi Chew confirmed in the memo to employees that the parent company ByteDance has officially signed a protocol with the aforementioned investment consortium to establish a new company structure and governance model for TikTok's operations in the United States. In the letter, Shou expressed gratitude to employees for their long-term dedication and effort, stating that this is key for TikTok to maintain stable operations in a highly uncertain environment. He emphasized that the company will continue to focus on providing high-quality services for users, creators, businesses, and the global TikTok community, ensuring the platform's continued growth.

Oracle Bone Script, Silver Lake Capital, and MGX each hold 15% of the shares.

According to the contents of the memorandum, in the newly established TikTok joint venture in the United States, about half of the equity is held by investors, with Oracle, Silver Lake Partners, and MGX each holding 15% of the shares. ByteDance itself will retain 19.9% equity, while another 30.1% is held by affiliated companies of ByteDance's existing investors. The memorandum did not reveal the identities of other investors, and TikTok and the White House also declined to comment further.

Incorporate the protection of American citizens' safety into company terms.

In terms of corporate governance, the joint venture will establish a new board of directors consisting of seven members, the majority of whom will be American citizens, and will explicitly include provisions related to “protecting American citizens' data and national security.” In the future, the data of American users will be fully stored in a local system operated by Oracle, in response to long-standing concerns from the U.S. side regarding data security.

TikTok adjusts its Algorithm to protect the data security of American citizens.

The memo points out that for general users, the user experience will remain the same as it is now, and there will be no significant changes due to transactions; advertisers will also be able to continue advertising to the global market, and related businesses will not be affected. At the same time, TikTok's extremely critical recommendation Algorithm will be retrained based on data from U.S. users to ensure that content delivery is not manipulated by external forces. In the future, content review and policy formulation within the United States will also be handled by this joint venture company.

The algorithm has always been at the core of the security controversy surrounding TikTok. U.S. officials have repeatedly warned that ByteDance's algorithm may be influenced by the Chinese government, potentially swaying platform content in a subtle manner. On the other hand, China has insisted that, according to its laws, the relevant algorithms must remain under Chinese control. However, the bipartisan bill passed by the U.S. Congress and signed into law by the president explicitly requires that any divestment plan for TikTok must sever ties with ByteDance, especially in relation to the algorithm.

This transaction symbolizes the end of TikTok's uncertain situation in the United States that has lasted for years. According to previous legislation, if TikTok failed to complete the sale by the deadline, it would be banned from operating in the United States in January 2025. At that time, TikTok did indeed temporarily suspend services, but on the first day of Donald Trump's presidency, he signed an executive order allowing the platform to continue operating and initiated negotiations for the sale.

Subsequently, Trump signed multiple executive orders, continuously extending the trading deadline. Although there was a near agreement to split it into a deal held by American companies, it fell through due to changes in tariff policies that led to the Chinese side withdrawing. Ultimately, after several delays, the White House, in the form of an executive order, allowed TikTok to continue operating under the premise of meeting national security considerations.

Currently, TikTok has over 170 million users in the United States. A report released by the Pew Research Center this fall indicates that about 43% of American adults under 30 frequently get news through TikTok, a higher percentage than on other major social platforms like YouTube, Facebook, and Instagram, showing its growing influence among the younger generation in the United States.

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