AsianFin — A new plan on the operations of TikTok approved by U.S. President Donald Trump on Thursday shows that a new joint venture, with Americans holding six seats on the seven-member board, will oversee data security and be licensed to use the algorithms.
Trump said during the signing in the oval office that the new plan for TikTok’s operations in the United States complied with U.S. laws, ensuringits continued presence in the country.
The following chart offers a glimpse into the organizational structure of new operations. As part of the new framework, a proposed joint venture will take responsibility for TikTok’s data security and content protection within the U.S. This joint venture, reportedly valued at $14 billion, is separate from TikTok’s overall U.S. business, which was previously valued at around $40 billion.
Source: Caixin
The revised operational model outlined in Trump’s executive order introduces two key entities. First, ByteDance TikTok U.S., 100% owned by ByteDance, will remain the principal operating entity in the U.S. ByteDance TikTok U.S. will handle TikTok’s commercial activities, including e-commerce, branding, advertising, and other operational functions in the U.S. Additionally, it will manage global connectivity for TikTok and engage in product development and engineering support, according to Caixin.
Meanwhile the TikTok U.S. Data Security Joint Venture (TikTok USDS Joint Venture) will take charge of critical functions such as data security, content protection, and software integrity for the app in the U.S. Oracle, Silver Lake, and Abu Dhabi’s MGX will be main investors in TikTok’s U.S. business. Those three entities will control roughly 45% of TikTok U.S. ByteDance, TikTok’s Chinese parent, will own 19.9%, with the remaining 35% in the hands of ByteDance investors and new holders.
Rupert Murdoch, Lachlan Murdoch, Oracle’s Larry Ellison, and David Ellison, CEO of Paramount Skydance and Larry’s son are among the board members.
To ensure operational efficiency, the two entities will have a mutually agreed-upon revenue-sharing arrangement. ByteDance will continue to hold the intellectual property rights for TikTok’s core algorithm and will license its use to the TikTok U.S. Data Security Joint Venture for the U.S. market. This licensing agreement will be subject to approval from Chinese authorities before it becomes final.
