TikTok signs deal for sale of U.S. entity to American investors

Washington — After months of negotiations, TikTok has finally signed a deal to sell its U.S. operations to a consortium of American investors. This move comes as a result of a law passed last year, which mandated that TikTok’s China-based parent company, ByteDance, must sever ties with its American operations to avoid losing access to U.S. app stores and web-hosting services. Although the original deadline was set for January 2025, President Trump has extended it multiple times, most recently until Jan. 23, 2026.

Back in September, President Trump signed an executive order that paved the way for a deal to keep TikTok operating in the U.S. under a new corporate structure with American investors. As part of the proposed deal, ByteDance’s content recommendation algorithm powering TikTok will be replicated and retrained to operate solely on data from its U.S. user base. Cloud-computing firm Oracle will oversee the security aspects by hosting Americans’ user data and reviewing the app’s code to ensure its safety and compliance with regulations.

The agreement will establish a “joint venture” based in the U.S., with a majority of U.S. investors and owners, as well as American representation on its board of directors. ByteDance and its affiliates will own less than 20% of the new entity, keeping foreign ownership below the limit set by the divest-or-ban law. A consortium of American investors, including Oracle, are expected to have a significant stake in the new TikTok.

While the deal seems to comply with relevant laws and policies, some concerns have been raised about TikTok’s algorithm. Republican Rep. John Moolenaar of Michigan, the chairman of the House China committee, expressed reservations about the deal, stating that it may not fully address the potential risks posed by ByteDance’s involvement in the algorithm.

Despite these concerns, the Chinese government has expressed willingness to engage in productive commercial negotiations that comply with both Chinese and U.S. laws. The sale-or-ban law, upheld by the Supreme Court, has been a contentious issue, with President Trump issuing new orders to delay enforcement against companies like Apple and Google for hosting TikTok on their platforms.

Overall, the TikTok deal represents a significant step towards ensuring the platform’s continued operation in the U.S. while addressing national security concerns. As the transition to American ownership progresses, it remains to be seen how effectively the new entity will manage the algorithm and safeguard user data.