After years of political pressure, legal uncertainty, and diplomatic tension between Washington and Beijing, TikTok has struck a deal that will allow the short-video platform to continue operating in the United States. The agreement, announced on Thursday, resolves a standoff that began during Donald Trump’s first term in office and intensified under President Joe Biden, centering on national security concerns tied to TikTok’s Chinese parent company, ByteDance.
The deal brings clarity to TikTok’s status in the US, where around 200 million Americans use the app. It follows repeated delays to legislation that would have forced TikTok offline unless its US operations were sold to American investors. While the app narrowly avoided a ban several times, including a brief blackout earlier this year, the newly finalized arrangement establishes a new ownership and governance structure designed to address US concerns over data security and control.
A long-running political and legal battle
US scrutiny of TikTok dates back to 2020, when then-President Trump first floated the idea of banning the app, arguing that its Chinese ownership posed a national security risk. Lawmakers in Washington claimed Beijing could compel ByteDance to hand over sensitive data belonging to American users—allegations consistently denied by both TikTok and ByteDance.
The issue gained renewed momentum during Joe Biden’s presidency. In 2024, Biden signed legislation requiring ByteDance to divest TikTok’s US operations or face a nationwide ban. ByteDance responded by launching a legal challenge against the US government, setting the stage for a high-stakes confrontation.
That confrontation briefly came to a head in January last year, when TikTok went offline for US users for between 12 and 14 hours. Service was restored after Trump—then president-elect—pledged to reverse the ban. By September, Trump announced he had reached a deal with China to keep TikTok operating in the US, and in December, TikTok’s chief executive Shou Zi Chew confirmed that binding agreements had been signed with American and global investors.
Thursday’s announcement provided the most detailed picture yet of how the arrangement will work in practice.
A new US-based entity
At the center of the agreement is the creation of a new business, TikTok USDS Joint Venture LLC. This entity will be responsible for TikTok’s US operations and will function as an independent company with its own governance structure. TikTok says the joint venture will safeguard US user data, apps, and algorithms through enhanced data privacy and cybersecurity measures.
The company will be overseen by a seven-member board of directors, with a majority of American members. Adam Presser, formerly of WarnerMedia, has been appointed chief executive of the joint venture. The board will also include TikTok’s global CEO Shou Zi Chew, alongside executives from Oracle, Silver Lake, and MGX.
Donald Trump welcomed the announcement, posting on social media that he was “so happy to have helped in saving TikTok.” The BBC has contacted the White House and China’s embassy in Washington for comment.
Who owns TikTok in the US?
Ownership of TikTok’s US business is now split among a group of American and international investors, significantly reducing ByteDance’s control.
Three managing investors each hold a 15% stake:
- Oracle, the cloud computing giant chaired by Larry Ellison, a Republican megadonor and long-time Trump ally
- Silver Lake, a US-based technology investment firm with approximately $116bn (£85.9bn) in assets
- MGX, an Emirati investor focused on artificial intelligence and technology
ByteDance retains a 19.9% stake, falling just below the 20% threshold that US lawmakers had identified as a point of concern.
The remaining 35.1% is held by a consortium of companies, including the family office of tech executive Michael Dell—another Trump supporter—and Vastmere Strategic Investments, an affiliate of Susquehanna International Group. Susquehanna was co-founded by Jeff Yass, a Trump ally whose personal stake in ByteDance was estimated at around 7% last year. Susquehanna’s managing director, Mark Dooley, will also sit on the new company’s board.
The algorithm question
The most contentious issue throughout negotiations has been TikTok’s content recommendation algorithm—the so-called “secret sauce” behind the app’s global success. The algorithm determines what users see on their feeds and is widely credited for TikTok’s ability to keep users engaged.
Former social media executives have told the BBC that rivals such as Instagram Reels and YouTube Shorts have tried to replicate TikTok’s formula, but with limited success. As one put it, the company that builds the technology often understands it best.
ByteDance had long refused to sell or transfer the algorithm, a position supported by the Chinese government. However, last September, China’s top cybersecurity regulator signaled that Beijing could allow ByteDance to license the algorithm to a US-owned company—clearing the way for the current deal.
Under the agreement, the algorithm will be licensed to TikTok’s American owners and retrained exclusively on US user data. That data will be protected in line with US regulations and secured within Oracle’s US-based cloud infrastructure. Oracle will also oversee the retraining process.
What it means for users
While the deal ensures TikTok’s continued presence in the US, its practical impact on users remains uncertain. Experts say retraining the algorithm on US-only data could lead to noticeable changes in how the app functions.
Some suggest the US version of TikTok could become a lighter or slower platform, potentially operating differently from the global version. There are also questions about whether the algorithm will be as effective at recommending content as it has been in the past.
For now, what is clear is that TikTok has avoided a ban and entered a new phase of its US operations—one shaped as much by geopolitics and regulation as by technology and entertainment.