TikTok has finalized a deal to create a majority American-owned joint venture aimed at securing U.S. user data and avoiding a potential ban of the popular video-sharing app, its Chinese owner announced Thursday.
The agreement marks a major turning point for TikTok, which has faced years of scrutiny from U.S. lawmakers and regulators over national security concerns tied to its Chinese parent company, ByteDance. The app is used by more than 200 million Americans.
Under the deal, TikTok USDS Joint Venture LLC will be owned 80.1% by American and global investors, while ByteDance will retain a 19.9% stake. The venture is designed to safeguard U.S. user data, applications and algorithms through enhanced data privacy and cybersecurity protections.
Three managing investors — Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX — will each hold 15% ownership stakes. Oracle will also host TikTok’s U.S. algorithm and data on its domestic cloud infrastructure.
A White House official said both the U.S. and Chinese governments have signed off on the arrangement. The Chinese Embassy in Washington did not immediately comment.
President Donald Trump praised the deal in a social media post, calling the investors “Great American Patriots” and thanking Chinese President Xi Jinping for approving the agreement. Trump had previously sought to ban TikTok during his first term, citing national security concerns, but later opted not to enforce a 2024 law requiring ByteDance to divest its U.S. assets or face a ban — legislation that was upheld by the Supreme Court.
TikTok said the new venture will retrain, test, and update its content recommendation algorithm using U.S. user data, with the system secured within Oracle’s U.S.-based cloud. The joint venture will handle backend operations for the U.S. app, including data storage and algorithm management.
Former TikTok USDS executives Adam Presser and Will Farrell were named chief executive officer and chief security officer of the venture, respectively. TikTok CEO Shou Chew will serve on the board.
Additional investors include the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo L,I and NJJ Capital.
Source: Reuters