TikTok has officially launched a US joint venture tasked with “safeguarding the American content ecosystem”, with commercial activities such as e-commerce, advertising and marketing remaining under the company’s existing US entities.
The arrangement has been widely compared with Apple’s 2018 move to transfer mainland Chinese iCloud user data to Guizhou-Cloud Big Data (GCBD), according to Chinese media. GCBD is a project owned by the Guizhou provincial government-backed company AIPO Cloud (Guizhou) Technology.
Media outlet The Paper noted that Apple did not own a stake in AIPO Cloud, while Beijing-based ByteDance retained algorithms and intellectual property rights and remained the largest single shareholder of the new joint venture.
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The TikTok USDS Joint Venture, announced on Friday, is 19.9 per cent owned by ByteDance. Oracle, Silver Lake and MGX each hold 15 per cent, while affiliates of existing ByteDance investors control 30.1 per cent.
The Chinese government approved the deal, according to two people familiar with the matter. Beijing previously opposed a direct divestiture, revising the export control list in 2020 to include technologies like TikTok’s recommendation algorithm, which require official approval for export.
The TikTok arrangement is widely compared with Apple’s 2018 move to transfer mainland Chinese iCloud user data to Guizhou-Cloud Big Data. Photo: dpa
Under the new arrangement, the joint venture would “retrain the content recommendation algorithm on US user data”, with technology licensed by ByteDance, according to TikTok’s statement and earlier White House outlines. It would also “provide safeguards” for ByteDance’s other apps in the US, including video editor CapCut and lifestyle platform Lemon8.
