The TikTok deal is done, and Donald Trump is claiming victory, though it’s unclear whether the joint venture he set up with ByteDance and the Chinese government actually addresses Congress’s national security concerns.
In a press release on Thursday, TikTok announced “TikTok USDS Joint Venture LLC,” an entity set up to operate TikTok in the US.
ByteDance retains a 19.9 percent stake in the joint venture, valuing it at $14 billion, giving the Americans majority ownership, the release said. Three managing investors—Silver Lake, Oracle and MGX—each hold a 15 percent stake, while other investors, including Dell Family Office, the investment firm of Dell Technologies CEO Michael Dell, hold smaller, undisclosed stakes.
The Americans will also have majority control over the seven-member board of the joint venture. TikTok CEO Shaw Chew holds the sole seat at ByteDance. Chew told TikTok employees in an internal memo that finalizing the deal was a “great step,” 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 and 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 that the deal meets the requirements for a “qualified divestiture” to avoid the TikTok ban, otherwise required under the Protecting Americans from Foreign Adversely Controlled Applications Act. Questions remain, however, as lawmakers have yet to analyze the terms of the deal to determine whether it is true.
Critics told the NYT that the law “requires the divestiture to end any ‘operational relationship’ between ByteDance and TikTok in the United States.” This could be a problem, as TikTok’s release makes it clear that ByteDance will retain some control over the operation of the TikTok US app.
For example, while the US owner will retrain the algorithms and manage data security, ByteDance owns the algorithms and will “manage global product interoperability and certain commercial activities, including e-commerce, advertising and marketing.” It appears that the Trump administration has agreed to these terms to ensure that US TikTok users on the app are not cut off from the rest of the world.
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