TikTok finalizes deal with China to avoid U.S. ban, White House official says
Washington — In a significant development, China and the U.S. have reached an agreement to sell TikTok’s American operations a year after a federal law effectively mandated a nationwide ban on the popular social media app. The bipartisan law, passed in 2024, required ByteDance, TikTok’s China-based parent company, to sever ties with its American operations or face losing access to U.S. app stores and web-hosting services. The Supreme Court upheld this law, making it illegal for app stores to offer updates or new downloads of TikTok after January 19, 2025.
However, President Trump issued executive orders directing the Justice Department not to penalize tech companies hosting TikTok on their platforms, allowing the app to remain widely available in the U.S. despite the ban.
TikTok confirmed on Thursday that a joint venture, primarily composed of U.S.-based investors, had been established to take over the operations of the app for American users. The venture, led by U.S.-based Oracle and Silver Lake, along with Abu Dhabi-based MGX, will manage and own a combined 45% of the company. Other investors, including Dell CEO Michael Dell’s personal investment office and the quantitative trading firm Susquehanna International Group, will own 35%, while ByteDance will retain a 19.9% stake, just below the 20% cap allowed by the law.
The Chinese government’s plans moving forward remain unclear, with statements on the forced sale being vague. Any agreement would need to comply with Chinese laws and regulations. Under the new structure, the app’s U.S. operators will update the content recommendation algorithm using data from American users. Oracle will review and validate the source code regularly, ensuring compliance with the deal. The U.S. version of TikTok will remain interoperable with the global version, allowing Americans access to global content under the new agreement.
The board of directors of the new venture will include representatives from the investors and TikTok CEO Shou Chew. Adam Presser, who has been with TikTok since 2022, will serve as the CEO of the U.S.-based venture. Concerns may arise about the extent of separation from ByteDance intended by lawmakers when drafting the law. Regulations state that there should be no operational relationship between the new owners and ByteDance, including cooperation on the algorithm and data sharing.
Congress left the determination of a “qualified divestiture” to the president. GOP Rep. John Moolenaar of Michigan, chairman of the House Select Committee on the Chinese Communist Party, announced plans for a public hearing to address concerns regarding the TikTok deal, focusing on the CCP’s influence over the algorithm and data security.
Lawmakers and U.S. officials have long expressed national security concerns about TikTok. They feared that the Chinese government could exploit the app to spy on Americans, collect data, and conduct influence operations. During the court battle in 2024, the Justice Department rejected Oracle’s oversight capability, citing the complexity of TikTok’s algorithm and the time required for review. TikTok’s proposed mitigation plan, Project Texas, was deemed inadequate by the U.S. government and lawmakers.
TikTok argued that a sale would fundamentally alter the platform, as rebuilding the algorithm without data sharing with ByteDance would take years. Despite these challenges, the new agreement aims to address national security concerns while ensuring TikTok’s availability to American users.
