According to foreign media reports, on December 18 local time, TikTok CEO Shouzi Zhou sent an internal letter updating the progress of TikTok's U.S. business. The internal letter stated that ByteDance and TikTok have signed agreements with three investors and will establish a new TikTok U.S. joint venture. The new joint venture is named TikTok USDS Joint Venture LLC, which will be responsible for data protection, algorithm safety, content review, and software security in the United States. The other entities of TikTok in the U.S., which are wholly owned by ByteDance, will continue to handle commercial activities such as e-commerce, advertising, and market operations, as well as global interoperability of TikTok products. It is reported that related matters of the agreement will be completed no later than January 22, 2026.
This aligns with the previously disclosed TikTok U.S. plan by domestic media.
Image from previous media reports.
According to previous media reports, TikTok's future operations in the U.S. mainly involve two entities. The entity on the left side of the image, "ByteDance TikTok U.S. Company," will be responsible for commercial activities such as e-commerce and brand advertising, as well as global interoperability. This entity is fully owned by ByteDance.
The entity on the right side of the image is the TikTok U.S. Data Security Joint Venture, which is the TikTok U.S. Data Security Joint Venture LLC mentioned in the internal letter. It will be responsible for data and content security, software assurance, etc., in the U.S., to comply with U.S. laws and regulations.
The internal letter also mentioned that the new joint venture will be responsible for algorithm safety. According to previous media reports, ByteDance will continue to own the intellectual property rights of TikTok's algorithms, authorize the new joint venture to use them, and charge licensing fees to the latter.
It is understood that commercial activities such as e-commerce, advertising, and market operations are the main sources of revenue for TikTok, and will still be handled by entities such as the TikTok U.S. company wholly owned by ByteDance. The data and content security businesses handled by the new joint venture are non-profit in nature and have high operational costs. To ensure the operation of the joint venture, there will be commercially reasonable revenue-sharing arrangements between these entities.
Aside from the division of business between the two companies, the board seats and equity structure of the TikTok U.S. Data Security Joint Venture LLC are also consistent with previously disclosed information.
The internal letter from TikTok shows that ByteDance and TikTok have signed agreements with three investors, including Oracle, Silver Lake, and MGX. These new investors together hold 45% of the shares in the new joint venture; existing investors of ByteDance and their affiliated parties hold 30.1%, and ByteDance will retain 19.9% of the shares. It is understood that ByteDance remains the largest single shareholder of the new joint venture.
In addition, the new joint venture will be majority-owned by U.S. investors and managed by a new seven-member board of directors.
In fact, TikTok's U.S. plan is extremely similar to Apple's "Cloud in Guizhou" operational model in China. However, Apple has not invested in the business entity "Cloud in Aiper (Guizhou) Technology Co., Ltd." of "Cloud in Guizhou." Compared to this, ByteDance still holds an important position in the new joint venture in the U.S.
The internal letter from TikTok indicates that the relevant matters of the U.S. agreement will be completed no later than January 22, 2026. The agreement and comprehensive security measures will allow more than 170 million Americans to continue exploring, creating, and communicating on the platform, enjoying the same experience as today; advertisers will also continue to connect with global audiences without any impact.
Original: toutiao.com/article/7585351195062059539/
Statement: This article represents the views of the author himself.