TikTok closes deal to split US app from global business
4 hours ago Share Save Suranjana Tewari , Asia business correspondent and Lily Jamali , North America technology correspondent Share Save
Watch: Does TikTok's US deal threaten the company's global ambitions?
TikTok has closed a deal that will allow the hugely popular short-video app to continue operating in the US, it announced on Thursday. The deal comes after a years-long tussle between Washington and Beijing that began in Trump's first term in the White House when he tried unsuccessfully to ban the app over national security concerns. The platform was due to be banned in the US in January 2025 if its Chinese owner, ByteDance, failed to sell its US operations to American investors. But US President Donald Trump repeatedly postponed the enforcement of legislation to take down the app. The main source of contention was the app's powerful algorithm, which dictates the content recommended to users. Now that formula has been licensed to the app's American owners and will be trained only on US data. Experts say this will certainly produce changes, but how exactly it affects the 200 million Americans on the app remains unclear.
What is the deal about?
For years Washington has been pressuring TikTok to sell its US operations, citing national security concerns over its Chinese owner ByteDance. Lawmakers had expressed fears that Beijing could force the firm to hand over US users' data. Both TikTok and ByteDance have consistently denied the claim. The idea of a TikTok ban, first floated by Trump during his first term in 2020, gained momentum under Joe Biden's presidency. In 2024, Biden signed a law demanding that ByteDance sell TikTok or face a ban in the US. A legal battle ensued between ByteDance and the US government, and in January last year the app went offline for US users for 12 to 14 hours. That temporary blackout was restored after Trump, then the president-elect, pledged to reverse the ban.
Last September, Trump announced that he had reached a deal with China to keep the app running in the US. And in December, binding agreements were signed with American and global investors to operate TikTok's business in the US, according to a memo from its chief executive Shou Zi Chew. More details of this deal were outlined in TikTok's latest announcement. Under the agreement, a new business called TikTok USDS Joint Venture LLC will secure US user data, apps and algorithms through data privacy and cybersecurity measures. Trump has weighed in on the deal, writing on social media that he was "so happy to have helped in saving TikTok". The BBC has contacted the White House and the China's embassy in Washington for comment.
Who owns TikTok in the US now?
TikTok says the new joint venture will operate as an independent entity governed by a seven-member, majority-American board of directors. Adam Presser, formerly of WarnerMedia, was appointed as the chief executive of the joint venture. There are three managing investors for TikTok's US operations, each holding a 15% stake: Oracle - the cloud computing giant chaired by Larry Ellison, a Republican megadonor and longtime Trump ally
Silver Lake - a US tech investment firm that says it holds approximately $116bn in assets (£85.9bn)
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