TikTok Secures Future in US with New American-Owned Entity
In This Article
HIGHLIGHTS
- TikTok has finalized a deal to establish a US entity, avoiding a ban and ending a long-standing legal battle.
- The new entity, TikTok USDS Joint Venture LLC, will be majority-owned by American investors, including Oracle, Silver Lake, and MGX.
- ByteDance will retain a 19.9% stake, while the US investors will hold 80.1% collectively.
- The deal addresses national security concerns by ensuring US data privacy and cybersecurity measures.
- The content recommendation algorithm will be retrained using US data, but the impact on users remains uncertain.
TikTok has successfully navigated a complex legal and political landscape to secure its future in the United States by establishing a new American-owned entity. This development concludes a protracted saga that began during Donald Trump's presidency, when national security concerns over the app's Chinese ownership first surfaced.
A New American Venture
The newly formed entity, TikTok USDS Joint Venture LLC, will be primarily owned by American investors, including Oracle, Silver Lake, and MGX, each holding a 15% stake. ByteDance, TikTok's Chinese parent company, will retain a 19.9% share. The joint venture aims to address longstanding national security concerns by implementing robust data privacy and cybersecurity measures. Adam Presser, formerly of WarnerMedia, has been appointed as the CEO of the new venture, which will be governed by a seven-member, majority-American board of directors.
Addressing National Security Concerns
The deal comes after years of pressure from Washington to divest TikTok's US operations due to fears that the Chinese government could access American user data. Both TikTok and ByteDance have consistently denied these claims. The agreement includes provisions for retraining the app's powerful content recommendation algorithm using US data, although the exact impact on the app's 200 million American users remains to be seen.
Political and Legal Context
The path to this agreement was fraught with legal challenges and political maneuvering. In 2024, President Joe Biden signed a law requiring ByteDance to sell TikTok's US operations or face a ban. The Supreme Court upheld this law in January 2025. However, President Trump, upon taking office, postponed the ban and facilitated negotiations leading to the current deal. In a social media post, Trump expressed his satisfaction with the outcome, thanking China's President Xi Jinping for his cooperation.
WHAT THIS MIGHT MEAN
With the establishment of TikTok USDS Joint Venture LLC, the app's immediate future in the US appears secure. However, the long-term implications of this deal remain to be seen. The retraining of the algorithm using US data could lead to changes in user experience, potentially affecting the app's popularity and engagement levels.
Politically, this development may ease tensions between the US and China, at least in the realm of digital technology and data privacy. However, it also sets a precedent for how foreign-owned tech companies might be required to operate in the US, potentially influencing future policy decisions.
Experts suggest that while the deal addresses immediate national security concerns, ongoing scrutiny of TikTok's operations will likely continue, ensuring compliance with US data protection standards.
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TikTok Secures Future in US with New American-Owned Entity
In This Article
Daniel Rivera| Published HIGHLIGHTS
- TikTok has finalized a deal to establish a US entity, avoiding a ban and ending a long-standing legal battle.
- The new entity, TikTok USDS Joint Venture LLC, will be majority-owned by American investors, including Oracle, Silver Lake, and MGX.
- ByteDance will retain a 19.9% stake, while the US investors will hold 80.1% collectively.
- The deal addresses national security concerns by ensuring US data privacy and cybersecurity measures.
- The content recommendation algorithm will be retrained using US data, but the impact on users remains uncertain.
TikTok has successfully navigated a complex legal and political landscape to secure its future in the United States by establishing a new American-owned entity. This development concludes a protracted saga that began during Donald Trump's presidency, when national security concerns over the app's Chinese ownership first surfaced.
A New American Venture
The newly formed entity, TikTok USDS Joint Venture LLC, will be primarily owned by American investors, including Oracle, Silver Lake, and MGX, each holding a 15% stake. ByteDance, TikTok's Chinese parent company, will retain a 19.9% share. The joint venture aims to address longstanding national security concerns by implementing robust data privacy and cybersecurity measures. Adam Presser, formerly of WarnerMedia, has been appointed as the CEO of the new venture, which will be governed by a seven-member, majority-American board of directors.
Addressing National Security Concerns
The deal comes after years of pressure from Washington to divest TikTok's US operations due to fears that the Chinese government could access American user data. Both TikTok and ByteDance have consistently denied these claims. The agreement includes provisions for retraining the app's powerful content recommendation algorithm using US data, although the exact impact on the app's 200 million American users remains to be seen.
Political and Legal Context
The path to this agreement was fraught with legal challenges and political maneuvering. In 2024, President Joe Biden signed a law requiring ByteDance to sell TikTok's US operations or face a ban. The Supreme Court upheld this law in January 2025. However, President Trump, upon taking office, postponed the ban and facilitated negotiations leading to the current deal. In a social media post, Trump expressed his satisfaction with the outcome, thanking China's President Xi Jinping for his cooperation.
WHAT THIS MIGHT MEAN
With the establishment of TikTok USDS Joint Venture LLC, the app's immediate future in the US appears secure. However, the long-term implications of this deal remain to be seen. The retraining of the algorithm using US data could lead to changes in user experience, potentially affecting the app's popularity and engagement levels.
Politically, this development may ease tensions between the US and China, at least in the realm of digital technology and data privacy. However, it also sets a precedent for how foreign-owned tech companies might be required to operate in the US, potentially influencing future policy decisions.
Experts suggest that while the deal addresses immediate national security concerns, ongoing scrutiny of TikTok's operations will likely continue, ensuring compliance with US data protection standards.
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