TikTok Seals Deal to Operate in the US After Years of Drama

(Bloomberg) — TikTok and its Chinese parent ByteDance Ltd. have closed a long-awaited deal to transfer parts of their US operations to American investors, securing the popular video app’s future in the US and avoiding a nationwide ban.

The social media company has officially established a US entity with three managing investors: Oracle Corp., private equity firm Silver Lake Management LLC and Abu Dhabi-based investment company MGX. TikTok Chief Executive Officer Shou Chew — who will continue running ByteDance’s most valuable asset globally — gets a seat on the board. Adam Presser, who was TikTok’s head of operations, trust and safety, will now helm the American venture as CEO.

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A TikTok sale concludes a yearslong geopolitical and regulatory tug-of-war that, for half a decade, has threatened to shut down TikTok in the US over national security concerns. Congress originally passed legislation in 2024 to ban the app unless ByteDance sold TikTok – citing concerns that the Chinese government could abuse US user data or use the app to push narratives preferred by Beijing. TikTok has maintained neither has happened.

US President Donald Trump cheered the saga’s conclusion in a Truth Social post, where he again credited the social media phenom for helping him win the 2024 election. And he thanked his Chinese counterpart Xi Jinping for approving the deal. “He could have gone the other way, but didn’t, and is appreciated for his decision,” Trump wrote.

The venture’s valuation remains unclear, but US Vice President JD Vance has cited a price tag of about $14 billion. The worth of TikTok’s American business — which spans advertising, e-commerce and live-streaming — has been estimated at $35 billion to $50 billion in the past.

A deal was initially supposed to be done by January 2025 to avoid a ban, but Trump extended the deadline on several occasions to give TikTok more time.

The resolution, years after a potential ban was first discussed, is a win for small businesses, big brands and content creators whose livelihoods depend on TikTok, and for the roughly 200 million US users who frequent the app each month for news and entertainment.

Under the arrangement — originally announced by the Trump administration in September — new investors including Oracle, Silver Lake and MGX will own 50% of the new TikTok US entity. Existing ByteDance investors will control 30.1% and ByteDance 19.9%, in accordance with the law.

The new entity will be responsible for moderating content on TikTok and protecting US users’ data. It will be governed by a new, seven-member majority-American board. Oracle, already a longtime TikTok cloud computing partner, will serve as a security guard charged with ensuring TikTok is following the law.

Still, critics have argued that the arrangement doesn’t adequately adhere to the US national security law passed in 2024 under the Biden administration that forced a spinoff. It’s unclear whether any of those critics will challenge the deal.

That law stipulates that ByteDance can have no operational relationship with US TikTok. TikTok says its joint venture has been established in compliance with Trump’s September executive order.

The deal the White House put forward allows ByteDance to lease a copy of its content algorithm to the forthcoming US TikTok entity, retraining the new algorithm on US user data.

ByteDance is also expected to maintain control over valuable parts of its US TikTok business, including its advertising division and fast-growing e-commerce arm TikTok Shop.

Why TikTok’s Spinoff in the US Still Matters: Businessweek Daily

–With assistance from Mark Anderson and Jennifer A. Dlouhy.

(Updates with Trump’s comment in the fourth paragraph.)

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