TikTok Finalises a Deal to Form a New American Entity

TikTok has closed a deal to create a new American presence, avoiding the threat of a looming ban in the US that has been discussed for years on the platform now used by more than 200 million Americans.

The social video platform company has signed deals with major investors including Oracle, Silver Lake and Emirati investment firm MGX to form the new TikTok US joint venture. The new version will operate under “defined security measures that protect national security through comprehensive data protection, algorithm security, content moderation, and software safeguards for U.S. users,” the company said in a statement on Thursday. American TikTok users can continue to use the same app.

President Donald Trump praised the agreement in his Truth Social post, specifically thanking Chinese leader Xi Jinping “for working with us and ultimately ratifying the Agreement.” Trump added that he hopes “I will be remembered by those who use and love TikTok in the future.”

Adam Presser, who previously served as TikTok’s chief operations, trust and security officer, will lead the new venture as CEO. He will work with a seven-member board of directors made up mostly of Americans, including TikTok’s CEO Shou Chew.

The deal ends years of uncertainty about the fate of the popular video-sharing platform in the United States. The platform was poised to go dark at the January 2025 deadline after wide bipartisan majorities in Congress passed and President Joe Biden signed a law that would ban TikTok in the US if it cannot find a new owner to replace ByteDance in China. It was like that for several hours. But President Donald Trump signed an executive order on his first day in office that will keep the company operating while his administration seeks a deal to sell it.

Guo Jiakun, a Chinese Foreign Ministry spokesman in Beijing, said Friday that “China’s position on TikTok has been consistent and clear” about the TikTok deal and Trump’s Truth Social post, echoing an earlier statement from the Chinese embassy in Washington.

The joint venture will focus on TikTok’s algorithm, as well as an emphasis on data protection, with US user data stored locally on a system operated by Oracle. The company said in its announcement that its content recommendation formula, which feeds custom videos tailored to users’ preferences and interests, will be retrained, tested and updated based on U.S. user data.

The algorithm has been a central topic in the security debate about TikTok. China has previously argued that the algorithm must remain under Chinese control by law. But the US regulation, passed with bipartisan support, said any divestment of TikTok should mean the platform had cut ties with ByteDance – particularly its algorithm. Under the terms of this agreement, ByteDance will license the algorithm to the US organization for retraining.

The law prohibits “any collaboration with respect to the operation of the content recommendation algorithm” between ByteDance and the potential new American ownership group; so it’s unclear how ByteDance’s continued involvement in this arrangement will play out.

“Who controls TikTok in the U.S. has a lot of influence over what Americans see on the app,” said Anupam Chander, a professor of law and technology at Georgetown University.

Oracle, Silver Lake and MGX are the three managing investors, each holding a 15% stake. Other investors include the investment firm of Dell Technologies’ billionaire founder Michael Dell. ByteDance holds 19.9% ​​of the joint venture.