TikTok and its Chinese parent ByteDance Ltd. have closed a long-awaited deal to transfer parts of its U.S. operations to American investors, securing the popular video app’s future in the U.S. and avoiding a nationwide ban.

The social media company has officially established a U.S. entity with three managing investors: Oracle Corp., private equity firm Silver Lake Management LLC, and Abu Dhabi-based investment company MGX. TikTok Chief Executive Officer Shou Chew — who will continue running ByteDance’s most valuable asset globally — gets a seat on the board. His lieutenant Adam Presser will helm the American venture as CEO.

A TikTok sale concludes a yearslong geopolitical and regulatory tug-of-war that, for half a decade, has threatened to shut down TikTok in the U.S. over national security concerns. Congress originally passed legislation in 2024 to ban the app unless ByteDance sold TikTok – citing concerns that the Chinese government could abuse access to U.S. user data or use the app to push narratives preferred by Beijing. TikTok has maintained neither has happened.

A deal was initially supposed to be done by January 2025 to avoid a ban, but U.S. President Donald Trump extended the deadline for a deal on several occasions to give TikTok more time. The resolution, years after a potential ban was first discussed, is a win for small businesses, big brands and content creators whose livelihoods depend on TikTok, and for the roughly 200 million U.S. users who frequent the app each month for news and entertainment.

Under the arrangement — originally announced by the Trump administration in September — new investors including Oracle, Silver Lake and MGX will own 50% of the new TikTok U.S. entity. Existing ByteDance investors will control 30.1% of the new company, and ByteDance will hold 19.9%, in accordance with the law.

The new entity will be responsible for moderating content on TikTok and protecting U.S. users’ data. It will be governed by a new, seven-member majority-American board. Oracle, already a longtime TikTok cloud computing partner, will serve as a security guard charged with ensuring TikTok is following the law.

Still, critics have argued that the arrangement does not adequately adhere to the U.S. national security law passed in 2024 under the Biden administration that forced a spinoff, and it’s unclear if any of those critics will challenge the deal.

That law stipulates that ByteDance can have no operational relationship with U.S. TikTok. TikTok says its joint venture has been established in compliance with Trump’s September executive order.

The deal the White House put forward allows ByteDance to lease a copy of its content algorithm to the forthcoming U.S. TikTok entity, retraining the new algorithm on U.S. user data. ByteDance is also expected to maintain control over valuable parts of its U.S. TikTok business, including its advertising division and fast-growing e-commerce arm TikTok Shop.

—With assistance from Zheping Huang and Mark Anderson.

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