(Reuters) -TikTok’s China-based owner ByteDance will maintain ownership of TikTok’s U.S. business operations and will cede control of the app’s data, content and algorithm to the newly formed joint venture, three sources familiar with the matter said.
ByteDance’s bigger-than-expected role in the new TikTok entity lays out the continued and significant involvement of the China-based global tech giant.
On Thursday, U.S. President Donald Trump signed an executive order declaring a plan to sell the China-based company’s TikTok U.S. operations to a consortium of investors that include Oracle, Silver Lake and others to satisfy national security requirements.
The details about the ownership structure under discussion may raise questions in Congress and among critics about whether the deal approved by Trump represents a qualified divestiture of all of TikTok’s U.S. assets as required under a 2024 law, which required ByteDance to divest its U.S. operations or face a ban.
On Friday after a Reuters report, the chair of the House Select Committee on China John Moolenaar, a Republican, said he will conduct full oversight over the deal, adding that the deal should “preclude operational ties between the new entity and ByteDance.”
“The law also set firm guardrails that prohibit cooperation between ByteDance and any prospective TikTok successor on the all-important recommendation algorithm,” Moolenaar said.
The structure is still under discussion and could yet change, these sources said.
The White House did not reply to a request for comment. ByteDance did not reply to a request for comment after Asia business hours. TikTok in the U.S. did not immediately respond to a request for comment.
Sources said the new U.S. TikTok would be divided into two companies. The joint venture that was announced by Trump will serve as the backend operations to the U.S. company and handle U.S. user data and algorithm. ByteDance is expected to be the single largest minority shareholder in the joint venture, sources said.
A separate division that will continue to be wholly owned by ByteDance will control the revenue-generating business operations such as e-commerce and advertising, these sources said.
The new U.S. company will be valued at around $14 billion, Vice President JD Vance said.
Reports in Chinese media published on Friday described a two-part structure in which ByteDance will continue to own the part of TikTok U.S. that will be responsible for e-commerce, branding operations and interconnection with international operations, while a separate new joint venture will handle the user data and algorithm. The reports by Chinese media outlets LatePost and Caixin were taken down later on Friday.
Saving TikTok in the U.S. is important to Trump. He talks about TikTok often and how it has helped him reach young voters. He has credited TikTok, which has 170 million U.S. users, with helping him win reelection last year, and has 15 million followers on his personal TikTok account. The White House also launched an official TikTok account last month.
(Reporting by Reuters newsroom, Editing by Franklin Paul)
