Kevin Mayer on TikTok's US Joint Venture: A Good Deal for Security and Commerce

TikTok's US Joint Venture Structure

• 🤝 TikTok's parent company, ByteDance, has agreed to form a new US joint venture to house the US version of the app.
• 🇺🇸 This JV will be majority-owned by US investors, with ByteDance's ownership potentially below the 20% threshold.
• 🔒 Oracle will manage and retrain the algorithm, ensuring data flow and access are limited to the US, addressing security concerns.

Chinese Government and Algorithm Ownership

• 🇨🇳 While no official Chinese government approval has been announced, state media signals indicate Beijing's approval.
• 📜 The deal is framed as being in line with Chinese law, with Oracle only reviewing, not copying or stealing, the algorithm.
• 🔑 The algorithm code remains owned by China, but a new instance will be licensed and housed on Oracle servers in the US, with US data used for retraining.

Commercial Viability and Future Outlook

• 📈 From a commercial perspective, the deal is set up for continued success, with ad sales and e-commerce oversight by ByteDance.
• 📱 App updates are expected to be a non-issue for users, with seamless interoperability and data encapsulation within the US.
• ❓ The structure, with multiple owners including Silver Lake, MGX, and Oracle, makes future M&A events difficult.
• 🚀 It is hoped that ByteDance itself will go public as a result of this joint venture.

Media Industry Speculation

• 🎬 In a curveball question, Kevin Mayer speculates that Paramount is the most likely buyer for Warner Brothers Discovery.
• 💬 He believes Paramount would come back with a bigger offer for the media company.