TikTok strikes deal for new US entity, ending long legal saga
- The San Juan Daily Star
- Jan 26
- 4 min read
By DAVID McCABE and EMMETT LINDNER
TikTok said late last week that its Chinese owner, ByteDance, had struck a deal with a group of non-Chinese investors to create a new U.S. TikTok, concluding a six-year legal saga that saw the app banned by Congress and ensnared in politicking between two global superpowers.
Investors including software giant Oracle; MGX, an Emirati investment firm; and Silver Lake, another investment firm, will own more than 80% of the new venture. That list also includes the personal investment entity for Michael Dell, the tech billionaire behind Dell Technologies, and other firms, TikTok said. Adam Presser, TikTok’s former head of operations, will be the CEO for the U.S. TikTok.
The deal is intended to loosen TikTok’s ties to China and address national security concerns that Beijing could use the app to surveil or manipulate its more than 200 million users in the United States. The changes enable “our U.S. users to continue to discover, create, and thrive as part of TikTok’s vibrant global community and experience,” Shou Chew, TikTok’s CEO, said in an internal memo that called the move “great news.”
The agreement, which was hammered out over more than a year, resolves existential questions about TikTok’s future. The app — with its unceasing feed of lip syncs, political endorsements, conspiracy theories and skin care tutorials — would have had to leave the U.S. market if it did not separate from ByteDance.
It was also the end of a legal odyssey. Since 2019, universities, several branches of the U.S. military, the vast majority of the House of Representatives and both President Donald Trump and President Joe Biden had tried to ban or block TikTok, with unanimous support from the Supreme Court. Influencers, mobilized by the app, lobbied politicians and mounted protests to save their feeds and follower counts. TikTok became embroiled in a trade war between the United States and China as the nations engaged in a heated contest over technology and industrial supremacy.
It was unclear how much, if anything, the deal will change the experience for TikTok’s users in the United States. Since the outlines of the plan were released months ago, users have raised concerns about whether the new owners will overhaul the algorithm that personalizes their feeds. And experts have cautioned that the arrangement might fail to address the national security concerns.
The driving force behind the deal is a federal law, passed in 2024 and upheld by the Supreme Court, that would have banned the app if it did not separate itself from ByteDance by early 2025. The app even went dark for 14 hours as the law’s deadline approached, sending some users into a tailspin. But Trump formally delayed the enforcement of the law several times after he took office again last January, as he pushed the company to reach a deal for new ownership.
Trump celebrated the announcement in a post on Truth Social, the social media platform he owns, calling it a “dramatic, final, and beautiful conclusion.”
“I am so happy to have helped in saving TikTok!” he wrote, adding, “I only hope that long into the future I will be remembered by those who use and love TikTok.”
Under the new arrangement, Oracle, MGX and Silver Lake will each own 15% of TikTok’s U.S. operations. ByteDance will own just under 20%.
The other investors include Dell’s office and a long list of investment firms, including affiliates of General Atlantic and Susquehanna, both of which previously invested in ByteDance.
The majority of the seven-member board for U.S. TikTok will be American, according to a December memo to TikTok employees. Chew has a seat on the board.
The new venture will moderate content in TikTok’s feed, deciding which posts to leave up and which to take down. It’s unclear what the value of the American version of TikTok will be. Vice President JD Vance said in September that a U.S. TikTok company would be valued at $14 billion. ByteDance, by contrast, has been valued at $480 billion in the private markets.
Trump signed an executive order in September that gave formal approval to the arrangement, a move required under the 2024 law.
The Chinese government has not publicly commented on TikTok’s announcement. For years, Beijing had been a major obstacle to completing a deal. When the United States first pushed to force a sale of TikTok, China amended its export control list to include technologies like algorithms and source codes, giving it the power to weigh in on any deal involving the app.
Last year, Trump administration officials said they had won Beijing’s support for a deal. China’s statements were more vague.
Several of the new investors have ties to Trump, raising concerns for some TikTok users that the app could start showing more content aligned with the president’s views or the positions of the U.S. government.
Larry Ellison, Oracle’s billionaire founder, has a close relationship with Trump and lobbied the president directly on behalf of the current bid by his son, David Ellison, to buy Warner Bros. Discovery. MGX has done business with the Trump family’s cryptocurrency firm, World Liberty Financial.
Anupam Chander, a law and technology professor at Georgetown University, said that the TikTok deal allowed for “more theoretical room for one side’s views to get a greater airing.”
“My worry all along is that we may have traded fears of foreign propaganda for the reality of domestic propaganda,” he added.
There are also lingering concerns that ByteDance will still influence the app’s content. In addition to its stake, ByteDance will keep TikTok’s coveted algorithm, which it will license to the new U.S. entity.
That arrangement may fall short of the 2024 law, which required the divestment to end any “operational relationship” between ByteDance and TikTok in the United States, critics said.
“They may have saved TikTok,” said Michael Sobolik, a senior fellow at the right-leaning Hudson Institute. “But the national security concerns are still going to continue.”
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