TikTok Avoids US Ban With New Independent Entity

Social media platform TikTok has finalized a deal with investors to establish an independent US entity, successfully navigating years of political pressure and averting a nationwide ban.

The short-video app, used by over 200 million Americans and 7.5 million businesses, announced the joint-venture agreement on Thursday. This move creates a US-specific version of TikTok controlled by a consortium of investment firms, many of which are American and several with ties to US President Donald Trump.

The resolution follows a turbulent period that began in 2024 when the Joe Biden administration passed legislation requiring the platform's Chinese parent company, ByteDance, to divest its US operations.

President Trump, who had paused the ban with an executive order after taking office in January 2025, celebrated the deal. In a post on Truth Social, Trump highlighted his role in "saving TikTok," calling the agreement a "very dramatic, final and beautiful conclusion."

"It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice," Trump wrote, adding, "I only hope that long into the future I will be remembered by those who use and love TikTok."

A Timeline of the US-TikTok Standoff

TikTok's challenges in the United States began during Trump's first presidential term in 2020, when authorities flagged the app as a national security risk and attempted to force its separation from ByteDance. While Trump issued an executive order for divestment, the Biden administration later reversed it.

US officials consistently raised two primary concerns:

• Data Security: How ByteDance handles the data of American users and whether the Chinese government could compel the company to surrender it.

• Algorithmic Influence: The potential for Beijing to influence the app's powerful content recommendation algorithm.

ByteDance and the Chinese government have repeatedly denied that Beijing pressures companies for user data, while China has also maintained that TikTok and its algorithm should remain under Chinese control.

The conflict escalated in April 2024 when Congress passed a law mandating that ByteDance sell its US operations by January 19, 2025, or face a complete ban. TikTok challenged the law in court, but the US Supreme Court ultimately upheld the government's position.

A protester supports the platform outside the U.S. Supreme Court during hearings in January 2025 concerning the potential ban.

On January 18, the day before the ban was set to take effect, the platform voluntarily went offline for approximately 12 hours. Service was restored after then-President-elect Trump confirmed he would extend the deadline. Upon taking office, Trump issued a 75-day extension on January 20 and continued to push back the deadline with subsequent executive orders.

In September, Trump announced a deal with China was in the works. By December, TikTok's CEO Shou Zi Chew confirmed in a memo that US firms and other investors had signed agreements for a divestment plan.

TikTok CEO Shou Zi Chew addresses the House Energy and Commerce Committee on data security and consumer privacy practices in March 2023.

Inside the New TikTok US Joint Venture

The agreement establishes an independent entity named TikTok USDS Joint Venture LLC, where "USDS" stands for US Data Security Inc.

According to TikTok's statement, this new venture will operate under strict safeguards to protect national security. Key operational changes include:

• Data Storage: The entity will separately secure and store all US user data in compliance with American cybersecurity laws.

• Algorithm Security: The US division's algorithm will be "retrained" using only US user data.

• Content Moderation: The new entity will manage US content through robust trust and safety policies, with accountability ensured via transparency reports and third-party certifications.

• Commercial Operations: TikTok US will oversee e-commerce, advertising, and marketing activities within the United States.

• Global Discoverability: The company confirmed that US creators will remain discoverable to a global audience.

The new entity will be led by CEO Adam Presser, previously TikTok's head of operations and trust and safety. He will report to a seven-member board, which will have an American majority and include TikTok CEO Shou Zi Chew.

Who Owns the New US TikTok?

The platform is now owned by multiple investors through the joint venture, not a single majority owner.

Notably, ByteDance will retain a 19.9% stake, despite the 2024 law stipulating that TikTok US should sever ties with the company.

Three major investment companies each hold a 15% stake:

• Silver Lake: A US-based private equity firm specializing in technology. Co-executive Egon Durban will sit on the TikTok US board.

• Oracle: The cloud computing giant that has been storing TikTok's US data since 2022. Its chairman is Larry Ellison, a known Trump ally.

• MGX: An investment firm from the UAE focused on artificial intelligence, chaired by the country's national security adviser, Tahnoun bin Zayed Al Nahyan.

Eight other investors are also part of the venture:

• Dell Family Office (owned by Trump ally Michael Dell)

• Vastmere Strategic Investments (an affiliate of Susquehanna International Group, founded by Trump ally Jeff Yass)

• Alpha Wave

• Revolution (owned by AOL founder Steve Case)

• Merritt Way

• Via Nova

• Virgo Li Inc

• NJJ Capital

Beijing's Stance on the Agreement

The Chinese government has not issued a specific comment on the newly announced deal.

On Thursday, Liu Pengyu, spokesperson for the Chinese embassy in Washington, told reporters that "China's position on TikTok has been consistent and clear," without offering further details.

However, President Trump suggested in his Truth Social post that the agreement had the approval of Chinese President Xi Jinping. "I would also like to thank President Xi, of China, for working with us and, ultimately, approving the Deal," Trump wrote. "He could have gone the other way, but didn't, and is appreciated for his decision."