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Washington. TikTok, the popular video-sharing app owned by ByteDance, has averted a potential ban in the United States through a new agreement establishing a U.S.-based entity with American and international investors. This growth fulfills the requirements of a law passed in April 2024, which mandated either a sale of TikTok’s U.S. operations or a complete ban of the app.Former President Donald Trump publicly endorsed the deal as a success.
The New Ownership Structure
Under the agreement,the new U.S. company, TikTok Global, will be majority-owned by American investors.ByteDance will retain a minority stake of 19.9%. The primary investors include Oracle, Silver Lake, and MGX, an investment firm based in Abu Dhabi. Each will hold a 15% stake in TikTok Global,collectively controlling 45% of the company. Oracle will also be responsible for storing TikTok’s U.S.user data securely in the cloud, addressing critically importent national security concerns (Reuters).
Addressing National Security Concerns
The core concern driving the legislation and subsequent negotiations was the potential for the Chinese government to access data from TikTok’s 170 million monthly active U.S. users (Statista). The new structure aims to mitigate this risk by ensuring U.S. data is stored on American soil and managed under American oversight. TikTok Global will also independently control and refine the algorithm that recommends content to U.S. users, further distancing it from ByteDance’s influence.
History of the TikTok Controversy
The scrutiny of TikTok began during the Trump administration in 2020, with concerns raised about data privacy and national security. Executive orders were issued attempting to ban the app, but these faced legal challenges.the Biden administration later revoked those orders and initiated a review of the risks posed by foreign-owned apps. This review ultimately led to the legislation passed in April 2024, forcing ByteDance to divest its U.S.