TikTok announces it has finalized deal to establish US entity, sidestepping ban

Core Viewpoint - TikTok has finalized a deal to establish a new US entity, allowing it to avoid a ban and concluding a prolonged legal dispute, with the new venture being majority-owned by American investors [1][2]. Group 1: Deal Structure and Ownership - The new entity will be 80.1% owned by American investors, including Oracle, Silver Lake, and MGX, while ByteDance retains a 19.9% stake [1]. - Silver Lake, Oracle, and MGX will each hold 15% in the new venture [9]. Group 2: Management and Oversight - Adam Presser, former general manager of TikTok, will serve as the CEO of the new venture, which will be overseen by a seven-member board of directors [4]. - The board includes executives from Oracle, Silver Lake, MGX, TPG, and TikTok's CEO Shou Zi Chew [4]. Group 3: National Security and Data Protection - The US entity will operate under strict safeguards to protect national security, including comprehensive data protections and algorithm security [5]. - Oracle will manage the algorithm that recommends videos to US users, ensuring it is retrained using US data to prevent outside manipulation [9]. Group 4: Regulatory and Political Context - The deal comes after a series of legal and political challenges, including a law passed by Congress in 2024 that threatened to ban TikTok unless it found a US buyer [2][8]. - The Chinese and US governments have approved the deal, with a spokesperson from the Chinese embassy stating that their position on TikTok remains unchanged [6]. Group 5: Public and Political Reactions - Former President Trump expressed gratitude to China's President Xi Jinping for approving the deal, emphasizing the involvement of American investors [7]. - Concerns regarding user data security persist among US lawmakers, with fears about potential data harvesting by the Chinese government [8].