In a significant development for data governance and algorithmic fairness, TikTok confirmed Thursday that it has finalized an ownership restructuring establishing a majority American-owned entity committed to training its recommendation systems exclusively on US user data. The agreement emphasizes data sovereignty in artificial intelligence systems.
ByteDance, the Beijing-based technology company behind TikTok, has agreed to reduce its ownership stake to 19.9% in the American entity, while US investors control 80.1%. The American ownership group includes Oracle, Silver Lake, and MGX with 15% each. Michael Dell’s investment firm also contributes.
The deal addresses legislation enacted in 2024 with particular concern about training data for AI systems and algorithms. Lawmakers worried that recommendation systems trained on global datasets including foreign user behavior could be manipulated or could reflect foreign priorities rather than American user preferences. The concept of data sovereignty—keeping American user data within American control—became central to the legislative solution.
Leadership of the American entity will fall to Adam Presser as CEO, with oversight from a seven-member board of directors with American majority and expertise to evaluate AI training protocols. Shou Chew will participate as a board member.
The new US entity commits to a data sovereignty approach where the platform’s recommendation algorithm undergoes complete retraining based exclusively on US user data, ensuring that what American users see reflects patterns and preferences from the American user base rather than global or foreign-influenced training data. This US-only training dataset continues with ongoing updates, creating an American recommendation system that evolves based solely on American usage patterns. Additional safeguards include comprehensive data protection, algorithm security, enhanced moderation, and software integrity. Both governments have approved the arrangement emphasizing data sovereignty.