TikTok Avoids Ban With New U.S. Ownership Deal/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ TikTok finalized a joint venture with U.S. investors, averting a federal ban. The new American entity will safeguard data, algorithm control, and content moderation. ByteDance retains a minority stake, raising questions about future U.S.-China tech tensions.
TikTok U.S. Ownership Deal – Quick Looks
- TikTok reaches deal with Oracle, Silver Lake, and MGX
- New American entity will manage U.S. TikTok operations
- App avoids ban set by 2025 legislation signed by Biden
- Deal signed after Trump’s executive order to keep app online
- U.S. user data to be stored locally, managed by Oracle
- TikTok’s algorithm to be retrained on U.S. data
- ByteDance to license algorithm but cannot co-operate directly
- ByteDance retains 19.9% stake in the U.S. entity
- Board led by majority-American directors; Adam Presser named CEO
- Chinese officials acknowledge deal but reaffirm consistent stance
Deep Look: TikTok Secures U.S. Future with New American Joint Venture
JAN. 23, 2026 — TikTok has cemented its future in the United States by striking a major deal with top American and global investors to form a new U.S.-based joint venture — a move designed to satisfy national security concerns and dodge a nationwide ban.
The deal arrives after years of uncertainty surrounding the popular social media platform, which now boasts over 200 million American users. Facing a legal deadline in early 2025 that would have banned the app if ownership didn’t change hands, TikTok now finds new life under a restructured ownership and regulatory framework.
Who’s Behind the New TikTok U.S. Entity?
Under the newly signed agreement, TikTok will operate in the U.S. through a joint venture backed by a consortium of high-profile investors:
- Oracle Corporation
- Silver Lake Partners
- MGX, an investment firm from the United Arab Emirates
- Michael Dell’s investment arm
Each of the three lead investors — Oracle, Silver Lake, and MGX — will hold a 15% stake, while ByteDance, TikTok’s Chinese parent company, retains a 19.9% minority share.
The venture will be headed by Adam Presser, former TikTok executive overseeing operations and safety, and governed by a seven-member board, the majority of whom are Americans. TikTok CEO Shou Chew will also serve on the board.
Trump’s Role and Bipartisan Legislative Pressure
Though the bipartisan law mandating TikTok’s U.S. divestiture was signed by President Joe Biden, it was Donald Trump, returning to office in 2025, who kept TikTok running by issuing an executive order on his first day. This executive action allowed negotiations to continue and directly enabled the finalization of the deal.
Trump praised the outcome in a Truth Social post, even thanking Chinese President Xi Jinping “for working with us and, ultimately, approving the deal.” He added, “I hope that long into the future I will be remembered by those who use and love TikTok.”
National Security Safeguards and Algorithm Overhaul
At the heart of the security debate was TikTok’s data handling and algorithm, both of which became central to U.S. concerns about Chinese surveillance and influence. To address these, the new U.S. entity will implement:
- Data Localization: All American user data will be stored on U.S. soil via systems operated by Oracle.
- Algorithm Separation: TikTok’s recommendation algorithm will be retrained and restructured based solely on American user data.
- Software Integrity: Strict controls will ensure ByteDance has no operational control or algorithmic input.
The U.S. law passed in 2025 prohibits any direct cooperation between ByteDance and the new entity concerning the operation of the recommendation algorithm.
However, ByteDance is expected to license the algorithm to the U.S. TikTok entity — a workaround that has drawn scrutiny from legal experts.
“Who controls TikTok in the U.S. has a lot of sway over what Americans see on the app,” said Anupam Chander, a Georgetown University law professor specializing in technology policy.
China Responds: Subtle but Consistent
The Chinese Foreign Ministry offered a carefully worded response to the deal and Trump’s comments. Spokesperson Guo Jiakun stated, “China’s position on TikTok has been consistent and clear,” echoing earlier remarks from Beijing’s embassy in Washington.
This suggests that while the Chinese government allowed the agreement to move forward, it remains committed to asserting control over the export of technologies, including TikTok’s algorithm.
Previously, China claimed that its laws require key technology like content recommendation systems to remain under domestic control, complicating any full divestment.
Future Implications: Tech Sovereignty and Global Regulation
This agreement marks a turning point in global tech governance, showcasing how governments can force platform restructuring to address national security concerns. Yet, questions remain:
- How will ByteDance’s algorithm license be monitored for compliance?
- Could future U.S. administrations revisit or unwind the agreement?
- Will other countries follow suit and demand similar localizations?
With this deal, TikTok avoids an outright ban and for now, continues to operate as a top platform in the U.S. market. But its operational structure — part American, part Chinese — ensures ongoing scrutiny.
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