"On Friday ByteDance announced it will form a new joint venture, TikTok USDS, to meet U.S. demands that it divest the platform or face a nationwide ban. The venture will host TikTok's U.S. user data on Oracle servers, review the app's code, set content moderation policies for U.S. users, and "retrain" recommendation algorithms using only U.S. data. It will also continue to generate meaningful revenue for ByteDance-and free it from some long-running political headaches."
"The announcement ends a long legal battle that spanned multiple administrations, strained U.S.-China relations, and cast uncertainty over one of America's most popular social media platforms. But the solution isn't entirely new. The joint venture largely follows the contours of " Project Texas," a proposal from back in 2023 where ByteDance offered to store U.S. user data domestically, set up an independent board, and even let U.S. officials examine its code."
ByteDance will form TikTok USDS, a joint venture designed to satisfy U.S. demands and avoid a nationwide ban. The venture will host U.S. user data on Oracle servers, permit review of app code, set content moderation policies for U.S. users, and retrain recommendation algorithms using only U.S. data. ByteDance will retain just under 20% ownership while Silver Lake, Oracle, and UAE-based MGX Fund Management will each control 15%. The structure closely follows a 2023 Project Texas plan but changes the ownership split. Congress passed a 2024 divest-or-ban law amid national security concerns about data access to China.
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