Story Highlight
– TikTok establishes new US entity to avoid ban.
– ByteDance retains 19.9% ownership in the venture.
– Major investors include Oracle, Silver Lake, and MGX.
– Deal approved by both US and Chinese governments.
– New board focused on US user data protection.
Full Story
TikTok has announced a significant agreement to form a new United States entity that aims to circumvent a potential ban and conclude a protracted legal dispute. The deal, orchestrated by ByteDance, which owns TikTok, creates a majority American-owned operation. This will see Oracle founder Larry Ellison, along with private equity firm Silver Lake and Abu Dhabi’s MGX, collectively holding 80.1% of the new company. ByteDance will retain a minority stake of 19.9%.
This announcement marks a notable turning point after former President Donald Trump initially threatened to prohibit the widely-used platform in the US five years ago. The ongoing uncertainty surrounding TikTok’s status followed a 2024 legislative move by Congress, which voted overwhelmingly to limit the app’s operations unless it was acquired by an American company. The Supreme Court upheld this law in January 2025, although it was delayed later that day when Trump signed an executive order to postpone the ban.
During subsequent negotiations involving legal teams from the US government, TikTok, and prospective investors, Trump continued to defer enforcement of the ban. In September, he endorsed a new executive order that sought to implement a system wherein American investors would take over the company’s operational management and establish a governing board predominantly made up of US cybersecurity and national security experts.
Adam Presser, the former general manager and global head of operations, trust and safety at TikTok, is set to assume the position of CEO of this new entity. This venture will have a board comprising seven directors, including leaders from Oracle, Silver Lake, and MGX, along with a senior advisor from TPG and TikTok’s current chief executive, Shou Zi Chew.
In a statement regarding this new venture, it was emphasized that the entity will implement specific measures designed to safeguard national security, including comprehensive data protection, algorithm security, and vigilant content moderation for American users. TikTok also indicated that its content recommendation algorithm will be trained and updated using data derived from US users.
Following the announcement, a White House representative confirmed that the agreement had received approval from both the Chinese and American governments. The Chinese embassy’s spokesperson reiterated the country’s established stance on TikTok, although details regarding this new arrangement were sparse.
In a social media post, Trump expressed gratitude towards Chinese President Xi Jinping, stating, “I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice.”
Concerns about TikTok from US lawmakers primarily revolve around the security of user data, with accusations that the Chinese government may exploit the platform to collect information on American users—a claim that TikTok has consistently denied.
Legislation enacted in 2024 under President Biden ensured that ByteDance would not maintain any operational relations with the US branch of TikTok, granting the president the authority to assess compliance with such regulations.
The uncertainty surrounding the app caused considerable disruption within the US influencer and creator communities, which rely heavily on the platform for their livelihoods. Silver Lake, Oracle, and MGX each hold a 15% stake in the new venture. Michael Dell’s investment firm is also among those investing in the initiative. Under these terms, Oracle will oversee the algorithm that curates video recommendations for US users, which will be developed using American data to ensure it remains free from external interference, as stated by Chew. Nevertheless, the Chinese government maintains rights to the algorithm, following disclosures from its cybersecurity authorities regarding agreements related to licensing and intellectual property rights.
