A new American entity for TikTok?

After years of political scrutiny and regulatory uncertainty, TikTok has finalized a deal to establish a new American entity, allowing the popular video-sharing platform to continue operating in the United States (US).

The agreement marks a pivotal moment in the long-running debate over national security, data protection, and foreign ownership in the digital age, while offering clarity to more than 200 million American users who rely on the app daily.

Ending years of regulatory uncertainty

The newly finalized arrangement brings an end to a prolonged standoff between Washington and TikTok’s Chinese parent company, ByteDance. US lawmakers from both parties had long argued that TikTok’s ownership structure posed potential national security risks, citing concerns that user data or content recommendations could be influenced by Beijing. Those concerns culminated in legislation requiring ByteDance to divest TikTok’s US operations or face an outright ban.

That threat became real in early 2025, when the app briefly went offline for American users ahead of the legal deadline. The blackout was short-lived, however, after President Donald Trump signed an executive order on his first day in office to keep TikTok running while negotiations continued. The newly announced deal now removes the immediate risk of a ban and offers a framework intended to satisfy US security requirements.

The structure of the new American entity

Under the agreement, TikTok will operate in the United States through a newly created joint venture, governed by a 7-member board with a majority of American directors. Adam Presser, a former TikTok executive with experience in trust and safety operations, has been appointed chief executive of the new entity, providing continuity alongside a governance structure more closely aligned with US oversight expectations.

Major American and international investors play a central role as well. Oracle, Silver Lake, and the Emirati investment firm MGX each hold a 15% stake and serve as managing investors. Other participants include investment vehicles linked to US technology leaders, while ByteDance retains a minority stake of just under 20%. This ownership balance was designed to ensure operational independence while preserving commercial continuity.

Data protection and algorithm oversight

At the heart of the deal are extensive safeguards aimed at addressing US security concerns. American user data will be stored locally and managed through systems overseen by Oracle, which will also host and secure the platform’s software infrastructure. TikTok has stressed that these measures are intended to prevent unauthorized access to sensitive information and ensure compliance with US data protection standards.

Equally significant is the treatment of TikTok’s content recommendation algorithm, widely regarded as the platform’s competitive advantage. Under the new structure, the algorithm will be licensed from ByteDance but retrained, tested, and updated exclusively using US user data.

Political and international dimensions

President Trump publicly welcomed the agreement, praising Chinese President Xi Jinping for approving the deal and presenting it as a diplomatic and economic success. The Chinese government has not formally commented on the final arrangement, although earlier statements suggested Beijing’s position on TikTok had remained consistent.

The deal underscores how technology platforms have become intertwined with geopolitics. TikTok’s future in the US has been shaped as much by strategic rivalry between Washington and Beijing as by commercial considerations, setting a precedent that could influence how other foreign-owned tech firms navigate regulatory pressure.

For American users, the most immediate impact is continuity. The app will remain available in its familiar form, although experts expect gradual changes as the US-specific algorithm evolves. Some analysts suggest the platform could operate differently from its global counterpart, potentially affecting how content is recommended and discovered.

For the broader tech industry, the agreement represents a novel model for resolving national security concerns without dismantling a popular service. It highlights the growing expectation that global platforms adapt their ownership, governance, and technical architecture to meet local regulatory demands.

Hence, TikTok’s decision to formalize a US-based entity with American investors marks a turning point in one of the most closely watched technology disputes of recent years. While questions remain about long-term governance and algorithmic independence, the deal offers a pragmatic solution that balances security concerns with user demand and commercial reality.