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.
In a statement issued Thursday, the company said 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. TikTok said the new version will operate with “defined safeguards” aimed at protecting US national security, including strengthened data protections, algorithm security, content moderation and software assurances for American users. The company said users in the United States will continue using the same app.
President Donald Trump welcomed the announcement in a post on Truth Social, publicly thanking Chinese President Xi Jinping and saying he hoped TikTok users would remember him for keeping the platform available.
China has not publicly commented on TikTok’s announcement. Earlier on Thursday, Chinese Embassy spokesperson Liu Pengyu said Beijing’s position on TikTok remained “consistent and clear.”
TikTok said the new US venture will be led by Adam Presser, a former top executive who previously oversaw operations and trust and safety. The entity will have a seven-member board that the company said will be majority American, and it will include TikTok CEO Shou Chew.
The 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 large bipartisan majorities in Congress and signed by then-President Joe Biden required TikTok to change ownership or face a US ban by January 2025. TikTok briefly went offline ahead of the deadline, but Trump later signed an executive order on his first day in office to keep the service running while negotiations continued.
TikTok said US user data will be stored locally through a system run by Oracle, while the new joint venture will also focus on the platform’s content recommendation algorithm. Under the plan, the algorithm will be retrained, tested and updated using US user data.
The algorithm has been central to the debate, with China previously insisting it must remain under Chinese control. The US law, however, said any divestment must sever ties with ByteDance, particularly regarding 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 operation of a content recommendation algorithm between ByteDance and a new US ownership group.
“Who controls TikTok in the U.S. has a lot of sway over what Americans see on the app,” Georgetown University law and technology professor Anupam Chander was quoted as saying.
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.
