China’s TikTok announced Thursday that it has finalized an agreement to spin off its American operations into a new joint venture, ending years of uncertainty over the platform’s future in the United States.
TikTok announced Thursday that it has finalized an agreement to spin off its American operations into a new joint venture, ending years of uncertainty over the platform’s future in the United States. The deal resolves a prolonged battle over whether the widely popular video-sharing application would remain accessible to its millions of American users amid national security concerns.
According to a press release issued by the company, the newly established United States joint venture will function under strict protective measures designed to address national security issues. These safeguards encompass comprehensive data protection protocols, algorithm security measures, content moderation standards, and software assurances specifically tailored for users in the United States.
The ownership structure of the new joint venture distributes stakes among several major entities. Technology corporation Oracle will hold a fifteen percent ownership share in the venture. UAE-based investment firm MGX will also acquire a fifteen percent stake, while technology investment company Silver Lake will obtain an identical fifteen percent portion. ByteDance, the Chinese parent company that originally owned TikTok, will maintain a minority stake of 19.9 percent in the new American venture.
President Donald Trump took to social media Thursday to express enthusiasm about the completed transaction. “I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors,” Trump wrote in his post. He added, “I only hope that long into the future I will be remembered by those who use and love TikTok.”
For the platform’s user base of Americans, the most significant implication of this agreement is straightforward: TikTok will continue to operate in the country. While the deal is not anticipated to produce dramatic changes to the user experience in the immediate term, gradual modifications may develop over time.
A central point of contention during the negotiation process concerned the fate of TikTok’s algorithm, the proprietary technology that drives the platform’s content recommendation system. The algorithm has been widely regarded as the key factor behind TikTok’s addictive nature and rapid growth.
Breitbart News previously reported that the fate of TikTok’s algorithm, widely regarded as a potent psychological weapon of the Chinese government, has been a major bone of contention in negotiations:
China’s TikTok, the popular short-form video app known for its highly personalized “For You” algorithm, is facing a critical juncture as its owner, ByteDance, is expected to sell its U.S. operations to comply with a divestment law. The pending sale has raised questions about the fate of TikTok’s algorithm, which has been a key factor in the app’s success and user engagement — and controversial for its impact on teen mental health, like pushing pornography to 13-year-olds.
According to the White House, the new owners will retrain TikTok’s content-recommendation algorithm and operate it in the United States, independent of ByteDance’s control. However, this transition is not without its challenges. TikTok employees and creators have expressed concerns about whether a retrained algorithm will be as effective in delivering the personalized content that users have come to expect. TikTok critics point out that the popular TikTok algorithm is essentially a Chinese psychological weapon.
Peter Schweizer has explained, based on his work in the book Blood Money, why the TikTok algorithm caused a deal to take so long to happen:
Schweizer points out that if China refuses to agree to a sale, it is because, as he disclosed in Blood Money, the algorithm used by the app is considered a state secret, not a regular “business” secret. The Chinese government has been quoted calling the app “a modern-day Trojan Horse” and a “key part of their information-driven mental warfare” against the West. The book showed that ByteDance does joint research with Chinese intelligence agencies on how to manipulate people online.
“China has been studying this for years,” he adds.
Under the terms of the finalized agreement, the newly formed American entity will undertake a process to retrain TikTok’s algorithm utilizing data collected from United States users. Oracle has been designated to supervise both the storage and security of this user data. This retraining process on a different dataset could potentially result in alterations to how content is personalized and presented to individual users.
Despite the creation of a separate American entity, the global TikTok organization controlled by ByteDance will continue to manage several crucial aspects of the business. These retained responsibilities include oversight of e-commerce operations, advertising functions, and marketing activities on the new United States platform.
The governance structure of the new venture includes a seven-member board composed primarily of American directors. Board members include Shou Chew, the CEO of ByteDance, and Kenneth Glueck, an Oracle executive. Additional board seats are occupied by executives from investment firm Susquehanna International Group, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX, along with other members.
Oracle, whose leadership includes Trump ally Larry Ellison, represents one of the largest investors in the venture and has been appointed as the new entity’s security partner, a role considered critical given the national security concerns that precipitated the original regulatory challenges.
Several significant questions surrounding the deal remain without clear answers. The financial valuation of TikTok’s United States operations has not been publicly disclosed. Additionally, the Chinese government has not issued a direct statement regarding the final agreement.
Some national security experts have raised concerns that the final structure of the deal may not completely address the security issues outlined in legislation passed by Congress. The 2024 law explicitly requires that ByteDance maintain no operational relationship with TikTok’s American entity. This legislation received validation from the Supreme Court.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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