After years of deliberation over its future, social media platform TikTok has come to an agreement with investors to form an independent US company.
More than 200 million Americans and 7.5 million businesses use the troubled short-video platform, which announced the joint-venture deal in a statement on Thursday.
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The agreement establishes a US version of TikTok, which will be run by investment firms, many of which are American and others have connections to US President Donald Trump.
Since 2024, TikTok has experienced problems as a result of legislation passed by lawmakers under the leadership of Joe Biden to force it to renounce its stakes in the Chinese internet company ByteDance.
Trump praised this week’s deal, which was delayed by an executive order when he took office in January 2025. Trump praised his role in “saving TikTok” and said the agreement was “very dramatic, final, and beautiful conclusion” in a post on Truth Social early on Friday.
The biggest group of Great American Patriots and Investors, the biggest in the world, will now own it, according to Trump, adding that it will be a significant voice.
The president added, “I only hope that those who use and love TikTok will remember me forever.”
Trump has repeatedly praised the app for enabling him to appeal to younger users during the campaign.
What are our current knowledge’s regarding the US version of TikTok:
What transpired at TikTok?
When US authorities attempted to force the app’s parent company, ByteDance, to sell after it was deemed a threat to national security, TikTok’s struggles in the US began in 2020, during Trump’s first term as president.
Before his first term ended, the Biden administration reversed the executive order that Trump signed instructing ByteDance to grant US companies.
Concerning how ByteDance would handle user data from the US, and whether China could impose pressure on it to turn it over.
Beijing, known for accurately suggesting content that keeps users engaged, had other concerns.
ByteDance and China have consistently denied that Beijing is putting pressure on businesses to collect and process user data. However, China has also argued that TikTok and its algorithm must remain in Chinese control.
If ByteDance’s US operations were not sold to US owners by January 19, 2025, a law passed in April of that year was passed by Congress. According to the law, TikTok US was required to end ties to ByteDance. The US Supreme Court upheld the ban, but TikTok sued the US government.
On January 18, the platform voluntarily went offline for about 12 hours before the ban was scheduled to go into effect. After Trump’s confirmation that he would extend the deadline once he took office, its service was reinstated.
On January 20, the president took the oath of office by executive order, which extended the deadline by 75 days. Then, he periodically signed executive orders to keep the ban in place.
Trump claimed in September that he had reached a deal with China that would allow TikTok to continue operating in the US. US companies and other investors had signed agreements regarding a divestment plan, according to a memo from TikTok’s Singaporean CEO Shou Zi Chew in December.
What does the new TikTok deal mean?
A separate US division of TikTok – TikTok USDS Joint Venture LLC is created as a result of the joint venture agreement with new investors. US Data Security Inc. is the acronym for US.
In accordance with the new entity’s agreement, US user data will be separately secured and stored in accordance with US cybersecurity laws. According to TikTok’s statement, “The majority American owned Joint Venture will operate under defined safeguards that protect national security by thorough analysis of US users’ data protections, algorithm security, content moderation, and software assurances.”
The organization will “protect US content” by “vigorous trust and safety policies and content moderation,” the statement continued, “while maintaining continuous accountability through transparent reporting and third-party certifications.”
The US division’s algorithm will be “retrained,” according to TikTok, adding that US user data will be used as a “retrained” algorithm. Additionally, the business added that creators from the US will remain accessible worldwide.
Additionally, TikTok US will be in charge of “certain commercial activities” in the US, including e-commerce, advertising, and marketing.
As CEO, Adam Presser, who most recently oversaw TikTok’s operations and trust and safety, will take over. He will serve on TikTok’s majority American board, which includes TikTok CEO Shou Zi Chew.
Who currently holds the title to TikTok US?
Because the business was formed through a joint venture with several investors, there isn’t just one owner.
Even though TikTok US’s ties to the company were prohibited by the 2024 Biden-era law, ByteDance will continue to own a 19.9% stake in the venture.
A 15% stake is held by three investor companies:
- A US private equity firm with branches in Singapore, Hong Kong, and London is Silver Lake, a tech investment firm. Kenneth Hao serves as its chairman. Co-executive Egon Durban sits on the US board of TikTok.
- Oracle is a cloud-based company that has been storing TikTok US data since 2022. Larry Ellison, a long-time ally of Trump, serves as its chairman.
- Tahnoun bin Zayed Al Nahyan, the country’s national security adviser, chairs the investment firm MGX, which is owned by the UAE.
Eight additional investors are present, including:
- Michael Dell, the co-founder of Dell Technologies and a Trump ally, owns Dell Family Office.
- Jeff Yass, a Trump ally, founded Vastmere Strategic Investments, an affiliate of Susquehanna International Group.
- A global investment firm called Alpha Wave
- Steve Case, the founder of AOL, owns Revolution.
- Merritt Way is owned and controlled by the San Francisco-based investment firm Dragoneer.
- Nova in Via
- Virgo Li Inc.
- NJJ Capital
What has China said about this deal?
China hasn’t specifically commented on the most recent announcement.
Before the deal was made public, Liu Pengyu, the Chinese ambassador’s representative in Washington, stated to reporters that “China’s position on TikTok has been consistent and clear,” but he did not go further.
Trump’s praise of his counterpart came on Friday when he showed that Chinese President Xi Jinping was in favor of the agreement.
Trump cited President Xi of China as saying, “I would also like to thank him for working with us and ultimately approving the Deal.”
Source: Aljazeera
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