Jakarta, INTI - TikTok has officially finalized an agreement to establish a new business entity in the United States, with majority ownership held by a group of American investors and their allies. The move was taken to avert a potential operational ban by the US government under President Donald Trump, which had demanded that TikTok be separated from its China-based parent company, ByteDance.
Under the new structure, ByteDance will retain only a 20% stake in TikTok’s U.S. entity, while the remaining 80% will be controlled by a consortium of investors. The group includes Oracle, Silver Lake, and MGX, the United Arab Emirates’ state-owned investment firm, each holding a 15% stake, along with other investors, including an investment firm owned by Dell’s chief executive.
Details of the agreement surfaced after TikTok CEO Shou Chew informed employees that the deal had been secured. The completion of the transaction brings months of negotiations to a close and ensures that TikTok can continue operating legally in the United States.
Focus on Data Security and Digital Sovereignty
TikTok emphasized that the new joint entity will prioritize data security and digital sovereignty by relying on Oracle’s U.S.-based cloud infrastructure to safeguard the data of American users.
The platform’s algorithm will also be retrained using U.S. user data, while content moderation for the American market will be handled by the newly established business entity.
Although TikTok’s U.S. entity will operate independently, interoperability will be maintained so that users in the United States can continue accessing global content, while U.S.-based creators retain the ability to reach international audiences.
Similar data protection measures will also apply to other ByteDance-owned applications operating in the United States, including CapCut and Lemon8.
Led by a Board of Directors of US Citizens
The newly established TikTok U.S. entity will be governed by a seven-member board of directors, the majority of whom are U.S. citizens. The board includes TikTok CEO Shou Chew, Silver Lake Co-CEO Egon Durban, Oracle Executive Vice President Kenneth Glueck, and MGX Chief Strategy and Safety Officer David Scott.
TikTok described this governance structure as a demonstration of its commitment to transparency, data security, and digital sovereignty in line with the regulatory requirements of the U.S. government.
Conclusion
The establishment of TikTok’s new U.S. entity marks a significant step in addressing regulatory concerns around data security and digital sovereignty. By shifting majority ownership to U.S. investors, localizing data infrastructure and governance, and maintaining global interoperability, TikTok aims to secure its long-term presence in the United States while aligning more closely with government requirements and user trust.
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