Washington: TikTok has finalized an agreement to create a new American entity, easing years of uncertainty and sidestepping the prospect of a US ban on the short-video platform used by more than 200 million Americans.
According to United News of Bangladesh, the company announced it has signed deals with major investors, including Oracle, Silver Lake, and Abu Dhabi-based investment firm MGX, to form a TikTok US joint venture. This new version intends to operate with defined safeguards for protecting US national security, which includes strengthened data protections, algorithm security, content moderation, and software assurances for American users. TikTok confirmed that users in the United States will continue to use the same app.
President Donald Trump expressed support for the announcement on Truth Social, publicly thanking Chinese President Xi Jinping and expressing hope that TikTok users would remember him for keeping the platform available. Meanwhile, China has not publicly commented on TikTok’s announcement. Earlier, Chinese Embassy spokesperson Liu Pengyu reiterated that Beijing’s position on TikTok remains consistent and clear.
TikTok revealed that the new US venture will be led by Adam Presser, a former executive overseeing operations and trust and safety. The entity will have a seven-member board, which will be majority American and include TikTok CEO Shou Chew.
This deal follows years of political and regulatory pressure in Washington over national security concerns tied to TikTok’s Chinese parent company, ByteDance. A law passed by Congress and signed by then-President Joe Biden required TikTok to change ownership or face a US ban by January 2025. Although TikTok briefly went offline ahead of the deadline, Trump later signed an executive order on his first day in office to keep the service running while negotiations continued.
TikTok stated that US user data will be stored locally through a system run by Oracle. The new joint venture will also focus on the platform’s content recommendation algorithm. The plan involves retraining, testing, and updating the algorithm using US user data.
The algorithm has been a central issue, with China previously insisting it must remain under Chinese control. However, US law requires any divestment to sever ties with ByteDance, especially concerning the algorithm. Under the new arrangement, ByteDance would license the algorithm to the US entity for retraining, raising questions about how the plan aligns with the law’s ban on any cooperation involving the algorithm between ByteDance and a new US ownership group.
Georgetown University law and technology professor Anupam Chander remarked that the control of TikTok in the US significantly influences what Americans see on the app.
Under the disclosed ownership structure, Oracle, Silver Lake, and MGX will serve as the three managing investors, each taking a 15% stake. Other investors include the investment firm of Dell Technologies founder Michael Dell. ByteDance will retain 19.9% of the joint venture.