Major Investors Back New U.S. Joint Venture
TikTok has finalized a long-anticipated agreement to form a new American entity, a move that effectively sidesteps a U.S. ban that has hovered over the popular video platform for years. The deal secures the app’s future for more than 200 million U.S. users and brings an end — at least for now — to ongoing political and legal uncertainty surrounding the Chinese-owned company.
Under the agreement, TikTok will operate a new U.S.-based joint venture backed by major investors including Oracle, Silver Lake and Emirati investment firm MGX. The company said the new structure will operate with “defined safeguards” designed to address national security concerns, including strict data protections, algorithm security, content moderation controls and software assurances for U.S. users. American users will continue using the same TikTok app without interruption.
Donald Trump celebrated the deal in a post on Truth Social, publicly thanking Chinese President Xi Jinping for approving the agreement. Trump wrote that he hopes he will be remembered by future TikTok users for helping keep the platform alive in the United States.
Leadership of the new entity will fall to Adam Presser, a former TikTok executive who previously oversaw operations and trust and safety for the company. Presser will serve as CEO and work alongside a seven-member board of directors that is majority American, though TikTok CEO Shou Chew will retain a seat on the board.
The deal resolves years of political wrangling over TikTok’s ownership and influence. In 2024, large bipartisan majorities in Congress passed legislation requiring TikTok to divest from its Chinese parent company or face a nationwide ban. Then-President Joe Biden signed the bill into law, setting a January 2025 deadline. When no agreement was reached, TikTok briefly went dark in the United States for several hours. On his first day back in office, Trump signed an executive order allowing the app to resume operations while negotiations continued.
Chinese officials reiterated their long-standing position following Trump’s announcement. Guo Jiakun, a spokesperson for China’s Foreign Ministry, said Beijing’s stance on TikTok “has been consistent and clear,” echoing earlier comments from China’s embassy in Washington.
A central feature of the agreement involves data security and TikTok’s powerful recommendation algorithm — a key point of contention in U.S. security debates. U.S. user data will be stored domestically through systems managed by Oracle, and the algorithm will be retrained, tested and updated using American user data, according to the company. TikTok said these changes are intended to limit foreign influence and provide greater transparency.
The algorithm has long been viewed as the heart of TikTok’s influence, shaping what millions of Americans see on the app each day. China has previously argued that the algorithm is protected under Chinese law and cannot be transferred outright. U.S. legislation, however, requires that any divestment fully sever operational ties — specifically algorithm control — with TikTok’s parent company, ByteDance.
Under the finalized deal, ByteDance will retain a 19.9% stake in the new U.S. venture and will license the algorithm to the American entity for retraining. That arrangement may still face legal scrutiny. The law explicitly bans “any cooperation with respect to the operation of a content recommendation algorithm” between ByteDance and a new American ownership group, leaving open questions about whether the structure fully complies with federal requirements.
“Who controls TikTok in the U.S. has a lot of sway over what Americans see on the app,” said Anupam Chander, a professor of law and technology at Georgetown University, underscoring why the algorithm remains at the center of the debate.
Oracle, Silver Lake and MGX will serve as managing investors, each holding a 15% stake. Additional investors include the investment firm of Michael Dell, the billionaire founder of Dell Technologies. While the agreement brings stability to TikTok’s U.S. operations, legal and political scrutiny is likely to continue as regulators assess whether the deal truly delivers the clean break from foreign control that Congress demanded.
