TikTok's U.S. Future Secured: New Entity Formed to Address Security Concerns

After years of navigating the threat of a ban, TikTok has finalized an agreement to create a U.S. entity, allowing the company to continue operating within the United States, according to the Associated Press. The new structure will operate under "defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation and software assurances for U.S. users," the company stated.

ByteDance Ltd., the original Chinese parent company, will retain a 19.9% stake in the new business.

The company has signed agreements with major investors, including Oracle, Silver Lake, and MGX, to form TikTok USDS Joint Venture. Adam Presser, formerly Head of Operations, Trust, and Safety at TikTok, will lead the new entity as CEO. The board of directors will consist of seven members, with a majority being American, including TikTok's CEO, Shou Chew.

According to the BBC, TikTok claims that its algorithm and U.S. users’ data will be protected within "Oracle’s secure US cloud environment."

The legal battles and uncertainties surrounding TikTok's status in the U.S. culminated on January 17, 2025, when the Supreme Court of the United States unanimously upheld a federal law that would ban TikTok unless ByteDance Ltd. initiated a sale by January 19. Following this, TikTok went dark, and major app stores removed the platform.

However, the service was restored just two days later, after then President-elect Donald J. Trump announced he would pause the ban via executive order on his first day in office. While the law allowed the president to grant a 90-day extension if there was "significant progress" in a sale to a non-Chinese-owned company, ByteDance repeatedly stated it would not sell.

During his presidency, Trump threatened to ban TikTok multiple times and even attempted to do so via executive order. TikTok responded by suing the U.S. government in August 2020. In 2021, President Biden revoked Trump’s ban and ordered an investigation into whether the app posed a national security threat. Reports later confirmed that ByteDance employees in China could access private U.S. user data. Subsequently, TikTok announced that all U.S. user traffic would be routed to Oracle Cloud servers.

In April 2024, Biden signed a bipartisan TikTok bill, giving ByteDance six months to sell its controlling stake or face a ban in the U.S. TikTok filed a lawsuit, calling the law an “extraordinary intrusion on free speech rights.” The court countered that divestiture was necessary to address national security concerns regarding TikTok’s data practices and its relationship with a foreign adversary.
Music’s TikTokalypse [2:1 GIF]