TikTok has announced the closure of a significant deal to establish a new US-based entity, effectively sidestepping a potential ban and bringing an end to a protracted legal battle. The agreement, finalised by ByteDance, TikTok's Chinese owner, sets up a venture that is majority-owned by American investors, ensuring the app's continued operation in the United States.
Details of the US-Owned Venture
The new entity will see investors including Larry Ellison's Oracle, the private-equity group Silver Lake, and Abu Dhabi's MGX owning more than 80% of the venture. This move is designed to address national security concerns that have plagued the platform for years. Each of these key investors—Silver Lake, Oracle, and MGX—will hold a 15% stake in the new venture, with additional investment from the firm of Michael Dell, founder of Dell Technologies.
Background and Political Context
This announcement comes five years after former President Donald Trump first threatened to ban TikTok during his initial term. The platform's future in the US became uncertain after Congress overwhelmingly passed a law in 2024 to ban the app unless it found a US buyer. The Supreme Court upheld this law in January 2025, but on Trump's first day back in office, he signed an executive order postponing the ban. Since then, he has repeatedly delayed enforcement while negotiations between the US government, TikTok, and potential American partners were ongoing.
In September, Trump signed another executive order outlining a plan for US investors to take over the majority of TikTok's operations. The new version of the app will be controlled by a seven-member board of directors, with a majority of American cybersecurity and national security experts. Adam Presser, formerly TikTok's general manager and global head of operations and trust and safety, has been appointed as the CEO of this new venture.
National Security Safeguards
According to the announcement, the US entity will operate under defined safeguards to protect national security. These include comprehensive data protections, algorithm security, content moderation, and software assurances for US users. Concerns from US lawmakers and officials have centered on user data security, with fears that the Chinese government could exploit the platform to harvest data from American users—allegations that TikTok has consistently denied.
The legislation passed in 2024 under President Joe Biden barred ByteDance from retaining operational ties with a US TikTok venture. However, the law granted the president authority to determine if a deal complies with its requirements. The threat of a ban had sparked widespread backlash in the US, particularly from influencers and creators who rely on the app for their livelihoods.
Implications and Future Outlook
This deal marks a pivotal moment in the ongoing saga of TikTok's presence in the United States. By establishing a majority US-owned entity, the platform aims to alleviate security concerns while maintaining its popular service for millions of American users. The involvement of high-profile investors like Oracle and Silver Lake underscores the commercial and strategic importance of this resolution.
As the new venture takes shape, it will be closely monitored for compliance with the outlined safeguards and its impact on the broader social media landscape. This development not only resolves immediate legal challenges but also sets a precedent for how international tech companies might navigate similar geopolitical tensions in the future.
