TikTok announced on Thursday that it has established a majority American-owned joint venture to operate its US business, allowing the company to avoid a ban over its Chinese ownership.

The video-sharing app is a global digital entertainment powerhouse, but its mass appeal and links to China have raised concerns over privacy and national security.

The TikTok USDS Joint Venture LLC will serve more than 200 million users and 7.5m businesses while implementing strict safeguards for data protection and content moderation, the company said.

The new structure responds to a law passed under US President Donald Trump’s predecessor Joe Biden that forced Chinese-owned ByteDance to sell TikTok’s US operations or face a ban in its biggest market.

Trump welcomed and claimed credit for the deal, but also thanked Chinese President Xi Jinping for approving it.

“I am so happy to have helped in saving TikTok!” Trump said in a post on Truth Social late Thursday.

“It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice.”

“I would also like to thank President Xi, of China, for working with us and, ultimately, approving the Deal,” he added.

Cybersecurity audit

ByteDance retains a 19.9 per cent stake in the joint venture — keeping its ownership below the 20pc threshold stipulated by the law.

Three investors — Silver Lake, Oracle and Abu Dhabi-based AI investment fund MGX — each hold 15pc stakes. Oracle’s executive chairman, Larry Ellison, is a longtime Trump ally.

Other investors include Dell Family Office, affiliates of Susquehanna International Group and General Atlantic.

The joint venture will retain decision-making authority over trust and safety policies and content moderation for US users.

But TikTok’s global entities will manage international product integration and commercial activities including e-commerce and advertising.

Under the arrangement, US user data will be stored in Oracle’s secure cloud environment, with cybersecurity audited by third-party experts and adhering to federal standards, TikTok said.

Jasmine Enberg, co-CEO of Scalable, a media company focused on the creator economy, said TikTok users would be relieved by the deal but that there were “still big questions about how this will all play out.”

“Behind the scenes, TikTok is likely working hard to assure advertisers it will remain business as normal,” she told AFP.

“While the need for users to download a new app seems unlikely, brand partners will want to know that their TikTok strategies won’t be disrupted.”

Ellison in spotlight

The joint venture will be governed by a seven-member, majority-American board including TikTok CEO Shou Chew and executives from investment firms.

TikTok executive Adam Presser was appointed CEO of the new entity, with Will Farrell serving as chief security officer.

The 2024 law came as US policymakers, including Trump in his first presidency, warned that China could use TikTok to mine Americans’ data or exert influence through its algorithm.

But Trump, crediting the app for his appeal with young voters, delayed enforcement through successive executive orders, most recently extending the deadline to January 22.

The deal largely confirms an outline announced to staff by Chew last month.

In September, one-time venture capitalist and Vice President JD Vance said the US entity would be valued at about $14 billion but it would ultimately be up to investors to determine pricing.

That month, Trump said a new venture had been agreed with China and would meet the law’s requirements.

Trump specifically named Ellison, one of the world’s richest men, as a major player in the arrangement.

Ellison has returned to the spotlight through his dealings with Trump, who has brought his old friend into major AI partnerships with OpenAI.