American investors will take over the US version of TikTok as part of agreements signed on Thursday by the app's Chinese owner, ByteDance. The ramifications could be huge for the millions of creators and fans of the immensely popular short-video app, but at the moment, they are mostly unknown.
The part-American, part-global investor group includes tech giant Oracle, a California-based private equity fund called Silver Lake, and the United Arab Emirates investment firm MGX. Those companies will hold an 80.1% stake in the venture, with Chinese-based ByteDance retaining a 19.9% stake. The joint venture will be governed by a new seven-member board of directors, with a majority of American members.
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TikTok thus avoids being banned in the US, something President Donald Trump threatened to do during both of his terms. ByteDance was facing a Jan. 23 deadline to divest its US assets or risk having the app banned in the US.
For years, the US government has raised concerns about potential national security risks stemming from TikTok's Chinese ownership, arguing that a company with ties to the Chinese government could gain access to the data of Americans who post on the platform.
"The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance," TikTok CEO Shou Chew told employees in a memo. "It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure."
It's estimated that TikTok has more than 170 million American users, as well as millions of creators, some of whom earn their living by making videos on the app.
Roll for algorithm?
One of those creators is Jacob Pauwels of the immensely popular Roll for Sandwich videos, where he rolls dice, Dungeons & Dragons-style, to determine what kind of sandwich he's going to make. Millions of people regularly watch his videos on TikTok, YouTube, Instagram and other platforms.
Pauwels said it was "stressful' not knowing if TikTok -- his largest platform -- was going to be banned in the US. Now that the app's fate seems a bit more secure, he said he still has concerns about American majority ownership of the brand.
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