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TikTok has finalised an agreement to establish a new American entity, averting a long-threatened ban in the United States on a platform used by more than 200 million Americans.
The social media company said it had signed deals with major investors, including Oracle, Silver Lake and Abu Dhabi-based investment firm MGX, to form a TikTok U.S. joint venture.
The company said the new entity would operate under safeguards designed to address national security concerns, including data protection, algorithm security, content moderation and software oversight. Existing US users will continue using the same app.
President Donald Trump welcomed the agreement in a post on Truth Social, crediting Chinese President Xi Jinping for cooperating on the deal and expressing hope that TikTok users would remember his role in keeping the platform available in the US.
The new venture will be led by Adam Presser, a former TikTok executive who previously oversaw operations. He will work with a seven-member board that has a majority of American directors and includes TikTok chief executive Shou Chew.
The deal brings an end to years of uncertainty over TikTok’s future in the United States. A law passed with strong bipartisan support in Congress and signed by former President Joe Biden required the platform to find a new owner or face a nationwide ban by January 2025.
TikTok briefly went offline ahead of the deadline before Trump, on his first day back in office, signed an executive order allowing the app to continue operating while negotiations continued.
The algorithm has been central to security concerns surrounding TikTok. While Chinese law previously required the technology to remain under Beijing’s control, US legislation mandated that any divestment must sever ByteDance’s control over the platform, particularly its recommendation system.
Under the deal, ByteDance will license the algorithm to the US entity for retraining, raising questions about compliance with the law’s prohibition on cooperation related to algorithm operations.
Oracle, Silver Lake and MGX will serve as managing investors, each holding a 15 per cent stake. Additional investors include the investment firm of Dell Technologies founder Michael Dell, while TikTok’s parent company, ByteDance, will retain a 19.9 per cent stake in the new venture.
