The development comes after years of legal and political challenges, which threatened to ban the app for more than 200 million Americans.

The new entity, TikTok USDS Joint Venture LLC, will house U.S. user data and algorithms under strict cybersecurity measures. American and global investors will hold 80.1% of the venture, leaving ByteDance with 19.9%. 

Oracle, Silver Lake, and Abu Dhabi-based MGX are the managing investors, each with a 15% stake. TikTok’s U.S. data and recommendation algorithm will be hosted on Oracle’s U.S. cloud, allowing oversight while ByteDance continues to manage revenue-generating operations like advertising and e-commerce.

The venture’s leadership includes former TikTok USDS executives Adam Presser as CEO and Will Farrell as chief security officer. TikTok CEO Shou Chew joins the board to provide strategic guidance. 

The JV will retrain and update TikTok’s content algorithm to ensure it operates solely on U.S. user data.

This deal results from the Protecting Americans from Foreign Adversary Controlled Applications Act, passed in April 2024. The law required ByteDance to divest TikTok’s U.S. assets or face a nationwide ban, a provision upheld by the Supreme Court in January 2025. 

Without the divestiture, TikTok risked removal from app stores and halted updates, which could have significantly weakened the platform’s U.S. presence.

The agreement received bipartisan attention. Former President Donald Trump, who first tried to ban the app in 2020 over national security concerns, praised the venture as “owned by a group of Great American Patriots and Investors.” 

The White House confirmed that both U.S. and Chinese authorities signed off on the deal, although the Chinese Embassy in Washington has not yet commented publicly.

The joint venture is part of a U.S.-China technology rivalry. In separating U.S. user data and algorithms from ByteDance’s global operations, the structure aligns with earlier national security debates surrounding Chinese tech firms. 

TikTok’s U.S. operations are effectively split, the venture oversees data and backend operations, while ByteDance maintains commercial operations, including e-commerce and advertising.

Investors include high-profile firms such as the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital. 

TikTok aims to comply with U.S. law and also to reassure users and regulators about data security while maintaining the app’s growth and influence in the U.S.

This is designed to avert a nationwide ban and settle long-running security challenges with Washington.

Under the binding agreement, ByteDance will cut its stake to 19.9%, while investors led by Oracle, Silver Lake and Abu Dhabi’s MGX will collectively take 80.1% ownership of a newly formed company, TikTok USDS Joint Venture LLC. 

The structure is intended to satisfy U.S. laws that demand the separation of TikTok’s American business from Chinese control.

The arrangement follows legislation passed by Congress in April 2024 that required ByteDance to divest TikTok’s U.S. operations or face a ban. The Supreme Court upheld the law in January 2025, setting a January deadline. This joint venture, due to close on 22 January, is meant to meet that requirement.

Ownership alone, however, has not ended the issue. The new entity will be run by a seven-member board, with Americans holding most seats. ByteDance will appoint one director. Oracle has been named the “trusted security partner” and will be responsible for auditing compliance and protecting US user data, which will be stored on Oracle’s cloud infrastructure inside the United States.

TikTok’s chief executive, Shou Zi Chew, told staff that the venture would “operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation and software assurance,” according to an internal memo. 

He also said TikTok’s global US entities would separately handle “global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing”.

Even so, there’s still uncertainty over the heart of the platform, its recommendation algorithm. Former U.S. officials and analysts say it is still not clear if the algorithm has been transferred, licensed, or remains under ByteDance’s control, with Oracle potentially limited to oversight rather than ownership.

Reports from Chinese media have suggested ByteDance may continue to play an operational role or receive revenue from the US business, leading to questions about Beijing’s influence despite the new structure.

President Donald Trump has openly credited TikTok with helping his re-election and maintains a large following on the app. His administration has also launched an official White House TikTok account. At the same time, Trump’s close ties to Oracle chief executive Larry Ellison have drawn criticism from Democrats.

Senator Elizabeth Warren has been among the most vocal opponents, saying: “Trump wants to hand over even more control of what you watch to his billionaire buddies. Americans deserve to know if the president struck another backdoor deal for this billionaire takeover of TikTok.”

Trump previously said high-profile investors, including Michael Dell and Rupert Murdoch, could be involved, though there are no reports about who ultimately joined the final deal.

This agreement ends the immediate threat of a ban, but not the argument around influence and control. 

The call, which began at 8 a.m. Washington time, was the first direct exchange between the two leaders in three months.

Earlier this year, Washington threatened to shut TikTok down unless its U.S. operations are transferred from Chinese parent company ByteDance to American ownership. 

Congress set a deadline of January 2025, though Trump has so far avoided enforcing it. He has admitted that banning the app outright could trigger a backlash among its millions of American users.

“I like TikTok; it helped get me elected,” Trump said on Thursday. “TikTok has tremendous value. The United States has that value in its hand because we’re the ones that have to approve it.”

Beijing, however, must sign off on any deal before it moves forward. Sources familiar with the talks say U.S. investors would take over TikTok’s American assets, but ByteDance would continue supplying the algorithm that drives the app’s powerful content recommendations. This unsettles U.S. lawmakers who argue that algorithmic control is inseparable from political influence.

“The platform may be American-owned, but if the algorithm is Chinese, the risk remains,” warned Senator Mark Warner, chairman of the Senate Intelligence Committee.

Trade and technology disputes

The TikTok talks are unfolding against a bigger economic fight. Since returning to office, Trump has raised tariffs on Chinese goods, some to levels not seen in nearly a century. Beijing retaliated with its own restrictions, leaving both economies struggling. 

The U.S. is battling high inflation and a record trade deficit with China, while China’s growth slowed to 4.2% in the second quarter of 2025, its weakest pace since the pandemic.

Despite these pressures, Trump insists he is close to securing better terms with Beijing. “We’re pretty close to a deal,” he said on Thursday, hinting at an extension of current trade terms. Washington is pressing China to buy more U.S. soybeans and Boeing aircraft, while also demanding a crackdown on fentanyl-related chemical exports—an issue the U.S. blames for soaring overdose deaths.

TikTok as leverage

Analysts say Beijing is using TikTok as a bargaining chip while holding back exports of rare-earth materials vital for U.S. technology production. “China’s effective use of sticks (rare earths) and carrots (TikTok) has turned things heavily in their favour,” said Scott Kennedy of the Center for Strategic and International Studies.

Washington, in turn, has restricted China’s access to advanced semiconductor designs, jet engines and specialised chemicals.

Political stakes

For Trump, TikTok represents more than a trade issue. It is also a political tool. Banning the platform risks alienating young voters who use it daily. Allowing it to continue under a restructured deal, however, lets him claim a win on national security without losing a vital channel of communication.

Diplomats are already eyeing a possible face-to-face meeting between Trump and Xi at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea next month. Such a meeting could test whether personal diplomacy can ease one of the most fractious U.S.–China relationships in decades.

Liu Pengyu, spokesperson for the Chinese embassy in Washington, said: “Heads-of-state diplomacy plays an irreplaceable role in providing strategic guidance for China-U.S. relations.”

As a sign of goodwill, Beijing recently allowed Wells Fargo banker Chenyue Mao to leave China after months of travel restrictions. Yet even with gestures like this, the unresolved issues—Taiwan, the South China Sea, and competing economic interests—make it obvious that a single phone call will not erase the deep mistrust between Washington and Beijing.

Talks resumed in Madrid on Monday, being the fourth round of discussions in as many months between delegations led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. 

The discussions cover far more than TikTok, as tariffs, rare earth exports, and economic ties are all on the table.

Bessent, speaking alongside U.S. Trade Representative Jamieson Greer, stressed that Washington would not compromise on security. “We are not willing to sacrifice national security for a social media app,” he said, adding that Beijing had come forward with “a very aggressive ask.”

While both sides say technical progress has been made, the sticking points go deeper. For Washington, the divestment of TikTok’s U.S. arm remains a red line. For Beijing, TikTok is part of a negotiation package that includes tariffs and long-standing export restrictions. 

Greer stated that, “From the Chinese perspective, they view as part and parcel of the potential TikTok deal a variety of matters, whether it’s tariffs or other measures that have been taken over years.”

The September 17 deadline for ByteDance to sell TikTok’s U.S. operations is fast approaching. It is already the fourth extension granted by President Donald Trump this year. 

Trump himself has spoken about flexibility, saying: “We may let it die, or we may… I don’t know. It depends on China.” Analysts note the political undertone: TikTok’s popularity with younger voters has given the White House leverage that goes beyond trade.

But the divestment itself is not straightforward. China classifies TikTok’s algorithm as a sensitive export, complicating any potential sale to U.S. buyers. Earlier this year, Beijing blocked a proposed restructuring of TikTok’s U.S. operations after Trump imposed steep tariffs.

The negotiations are also taking place against the backdrop of a fragile truce in the wider trade war. In July, China agreed to resume rare earth exports to the United States, crucial for defence and technology sectors. Yet Beijing has withheld its quota data for 2025, pointing to rare earths that may once again be used as a bargaining chip.

For now, tariffs remain partially reduced, U.S. duties stand at 30% on Chinese goods and China has imposed 10% on American exports. These reductions expire in November, after which Washington plans to maintain tariffs of up to 55% on Chinese imports unless a new deal is reached.

Despite the high stakes, expectations for a breakthrough in Madrid are low. William Reinsch, senior trade adviser at the Center for Strategic and International Studies, told reporters: “I’m not expecting anything substantive between the United States and China unless and until there is a one-on-one meeting between Trump and Xi. Setting that up is really what these talks are all about.”

Such a meeting may take place in October during the APEC summit in South Korea, but Beijing is unlikely to agree without significant concessions, particularly on export controls and tariff rollbacks.

For now, both sides appear willing to extend deadlines rather than risk collapse. A concluding press briefing in Madrid was tentatively scheduled, but whether it will announce progress or simply another pause in a long-running case is still unknown.

The new app, internally named “M2”, is expected to hit U.S. app stores on 5 September 2025,  just days before the extended deadline for its parent company ByteDance to sell its U.S. operations.

This version, unlike the global one, is being built to run on an entirely separate infrastructure by engineers in the U.S. and Singapore, aimed squarely at addressing American data privacy and national security concerns. 

According to sources familiar with the matter, users will be allowed to continue using the current TikTok app until March 2026, but will eventually be forced to migrate.

This drastic restructuring results from the Protecting Americans from Foreign Adversary Controlled Applications Act, signed into law in April, which mandates ByteDance’s full divestment from TikTok’s U.S. operations or risk being barred in the country.

President Donald Trump, whose administration pushed through the law, said recently: “We pretty much have a deal.”

He noted that the prospective buyers are a group of “very wealthy people”, though no names have been officially confirmed. Reports suggest Oracle and venture capital firm Andreessen Horowitz are part of the investor consortium.

Despite the positivity from Washington, the obstacle lies thousands of miles away in Beijing. Chinese authorities have made it clear that they oppose what they view as a forced sale.

The Chinese Ministry of Commerce previously stated that any technology export must go through its approval process, pointing that the final decision might rest on geopolitical rather than commercial terms.

This makes the entire operation fragile. With Trump’s trade issues against China escalating, including 145% tariffs on Chinese electric vehicles and tech components earlier this year, analysts suggest Beijing could use TikTok as a bargaining chip. In other words, the U.S. might have a buyer and a timeline, but China still holds the key.

For TikTok, the stakes couldn’t be higher. The platform commands more than 170 million users in the U.S. and serves over 7.5 million American businesses.

A sudden disruption, whether by government order or technical transition, could upend content creators’ incomes, freeze digital ad spending, and fragment a platform deeply embedded in U.S. popular culture.

There’s also the question of whether users will willingly adopt a new version of the app. Forced migration in digital products often faces resistance, and TikTok’s power lies in its network effects.

Fragmenting that network, even temporarily, could open doors for competitors or cause users to disengage altogether.

ByteDance has not issued a public statement regarding “M2” or the ongoing sale process. The Information, which first reported the app development, says internal testing is already underway.

During a Fox News interview on Sunday, Trump announced, “We have a buyer for TikTok, by the way. I think I’ll need probably China’s approval. I think President Xi will probably do it.”

He didn’t give names but insisted the potential buyers are “very wealthy people,” and that their identities will be made public “in about two weeks.”

Trump’s statement comes months after he extended the deadline, again, for TikTok’s Chinese parent company, ByteDance, to sell off the app’s U.S. operations. 

Despite a law signed in 2024 mandating either a sale or a nationwide ban by January 19, 2025, Trump has now postponed enforcement three times, with the latest deadline set for September 17.

This isn’t the first time a deal has come close. A proposal earlier this year would’ve transferred control of TikTok’s U.S. branch to a new American entity with majority U.S. ownership. But the plan derailed after Beijing objected, reportedly in retaliation for Trump’s aggressive trade measures, including a 34% tariff on Chinese imports.

In the same interview, Trump hinted at possible structures for the new deal, including a joint venture model where American stakeholders would hold a 50% stake. He has previously suggested Oracle’s Larry Ellison or Tesla’s Elon Musk could be involved, although Musk appears to be off the table for now.

Still, even with financial backing, there are political limitations. Under Chinese law, TikTok’s recommendation algorithm is classified as a restricted export. Any attempt to sell it abroad would need clearance from the Chinese government, a step that stalled the last deal.

Trump, however, remains confident. “I think President Xi will probably do it,” he said, leaving the impression that personal diplomacy might yet move things forward.

The stakes are high. TikTok has become deeply embedded in the U.S. digital economy. It counts over 170 million American users and serves around 7.5 million small businesses. Ironically, Trump himself benefited from the platform’s youth appeal during the 2024 election campaign and now seems reluctant to see it disappear.

But until a formal agreement is inked, and Beijing signs off, everything stays speculative with time ticking towards September, and all eyes now turn to China’s response.

It’s the third time the president has pushed the enforcement date, ignoring pressure from lawmakers and legal analysts who insist he lacks the authority to sidestep the law indefinitely. 

The Foreign Adversary Controlled Applications Act, passed in 2024 with bipartisan support, gave ByteDance until January 19, 2025, to either sell TikTok’s U.S. assets or shut down. The Supreme Court upheld the law earlier this year.

Trump, however, has repeatedly refused to act. First in January, then April, and now again in June, he’s granted delays, despite having signed the very law enforcing the sale. 

The latest extension moves the deadline to mid-September, with White House press secretary Karoline Leavitt confirming on Tuesday:

“President Trump will sign an additional executive order this week to keep TikTok up and running.”

She added, “President Trump does not want TikTok to go dark. The administration will spend the next three months making sure the sale closes so that Americans can keep using TikTok with the assurance that their data is safe and secure.”

But that “assurance” seems tied to far more than just national security as Trump has made no secret of the app’s value to his political base. TikTok’s influence on young voters during the 2024 election helped energise an important demographic for his campaign. 

Speaking in May, he candidly admitted, “TikTok helped me with young voters.”

Earlier this week aboard Air Force One, he told reporters that he planned to extend the deadline again, “Probably, yeah. Probably have to get China approval but I think we’ll get it. I think President Xi will ultimately approve it.”

A deal to spin off TikTok into a U.S.-based firm, majority-owned by American investors, was reportedly nearing completion earlier this year. But Trump’s abrupt imposition of up to 145% tariffs on Chinese imports in March soured negotiations. China signalled it would block the sale in response.

Now, Trump appears to be using the TikTok ban issue as leverage in ongoing trade discussions. He has implied he might reduce tariffs if Beijing agrees to approve the divestment. 

That makes TikTok not just a social media platform under investigation, but a bargaining chip in one of the world’s most volatile diplomatic relationships.

Democratic lawmakers argue Trump is undermining national security by stalling. Some insist the current offer on the table doesn’t meet the legal standard, and question whether Trump’s personal and political interests are clouding his judgment.

The administration, meanwhile, is caught between conflicting aims; appease China just enough to get the sale done, but not so much that it appears weak. All while keeping 170 million U.S. TikTok users happy.

The offer, addressed to Vice President J.D. Vance and Commerce Secretary Howard Lutnick, comes just days before the set date for the social media platform’s nationwide ban.

ByteDance, TikTok’s Chinese parent company, has been under pressure to sell its U.S. business following issues about national security. A law mandating the sale was upheld by the Supreme Court, and President Donald Trump, who initially delayed its enforcement, is now expected to make a final decision.

While Amazon’s bid has turned heads, insiders are saying it isn’t being taken seriously. Negotiations have been in motion for months, with Oracle, Blackstone, and a group led by billionaire Frank McCourt also vying for the app. Even with growing interest, ByteDance has stayed tight-lipped, neither confirming nor denying any potential deal.

The fate of TikTok is deeply entangled with Trump’s political manoeuvres. The former president, who commands a massive following on the platform, has hinted at extending the deadline again if necessary. “We have a lot of potential buyers,” he told reporters. “There’s tremendous interest in TikTok. The decision is going to be my decision.”

Behind closed doors, Trump has been discussing the matter with top officials, including National Security Adviser Mike Waltz and Director of National Intelligence Tulsi Gabbard.

The administration is reportedly considering a structure where U.S. investors hold a controlling stake in a new entity, “TikTok America,” with ByteDance retaining just under 20%—a threshold designed to limit Chinese influence.

Amazon bidding for TikTok isn’t the only one causing a stir. AppLovin, a mobile tech company, has entered the fray alongside a consortium that includes OnlyFans founder Tim Stokely. 

Perplexity AI, an artificial intelligence startup, has also made a case for acquiring TikTok, promising to “rebuild the TikTok algorithm without creating a monopoly.”

Meanwhile, some investors have taken a more aggressive approach. Jesse Tinsley, founder of Employer.com, has reportedly put forward a $30 billion offer, while Wyoming businessman Reid Rasner has tabled a $47.5 billion bid. However, ByteDance has yet to publicly engage with any of them.

At the heart of the debate is national security. U.S. intelligence agencies and regulatory bodies have long warned that ByteDance could be compelled to hand over user data to the Chinese government. TikTok has repeatedly denied such assertions, but officials are unconvinced.

Even if a deal is reached, China could still have the final say. The Chinese government has previously shown opposition to a forced sale, and any transaction involving TikTok’s algorithm or proprietary technology may require Beijing’s approval. Trump, aware of this, has reportedly floated the idea of easing tariffs on China in exchange for cooperation on the sale.

With the clock ticking, the pressure is on. If a buyer isn’t secured by the deadline, TikTok faces a U.S. shutdown. Trump, however, has left the door open for another extension.

Users have been advised to back up their content and, instead, migrate to Lemon8—another ByteDance-owned app with similar features.

TikTok Notes never really found its audience. Despite testing in Canada, Australia, and Vietnam, adoption stayed low. The platform functioned like Instagram, allowing users to post photos and slideshows, but it failed to gain traction in the competitive world of social media. Now, ByteDance is pulling the plug.

A notice sent to users stated: “This decision was not made lightly.” TikTok is encouraging those who liked Notes to move over to Lemon8, describing it as a “lifestyle app that offers a similar experience” but with “even more features.”

Lemon8 isn’t new. It launched in Japan in 2020 before expanding to the U.S. and Southeast Asia. The app blends elements of Instagram and Pinterest, offering users the ability to share curated lifestyle content with creative tools, filters, and stickers. ByteDance appears to be placing it as its long-term player in the photo-sharing space.

A TikTok spokesperson confirmed the transition: “We’re excited to bring the feedback from TikTok Notes to Lemon8 as we continue building a dedicated space for our community to share and experience photo content, designed to complement and enhance the TikTok experience.”

ByteDance’s decision to push Lemon8 is not just a product reshuffle. With the U.S. about to ban TikTok over national security issues, the company is hedging its bets. Lemon8 is being positioned as a potential fallback.

Last November, ByteDance made it easier for users to link their TikTok accounts to Lemon8 and cross-share content. This wasn’t just about convenience but strategy. If TikTok faces regulatory issues in key markets, ByteDance wants an alternative that can still keep its creators engaged.

Lemon8 had around 12.5 million active users globally as of December 2024. That’s a fraction of TikTok’s audience, but ByteDance is banking on its ability to scale. Unlike Notes, which was a direct Instagram competitor, Lemon8 leans more into lifestyle content—fashion, travel, food—giving it a different appeal.

The challenge, however, is competition. Instagram and Pinterest are topping in this space, and breaking into their user base won’t be easy. ByteDance will need more than cross-promotion with TikTok to make Lemon8 a success. It will need a strong monetisation strategy, creator incentives, and an identity that differentiates it from the competition.

Speaking aboard Air Force One on Sunday, Trump stressed the overwhelming interest in acquiring the platform. “We have a lot of potential buyers. There’s tremendous interest in TikTok,” he told reporters. “I’d like to see TikTok remain alive.”

ByteDance, under pressure from Washington, must offload the app or risk being shut out of the U.S. market. Lawmakers argue that the company’s Chinese ties are a national security threat, with concerns over data privacy and potential influence operations by Beijing.

A number of U.S. investors have surfaced as interested parties. Blackstone, one of the world’s largest private equity firms, is exploring a minority stake in TikTok’s U.S. business, sources familiar with the matter told Reuters. 

The firm is reportedly considering joining Susquehanna International Group and General Atlantic, two of ByteDance’s existing non-Chinese stakeholders, in injecting fresh capital to secure the deal.

Vice President JD Vance is confident that an agreement will take shape before the deadline. Meanwhile, Trump himself has implied a possible extension if negotiations require more time. 

However, China’s role in the process is still a wildcard. The former president acknowledged that Beijing would need to sign off on the sale, adding, “Maybe I’ll give them a little reduction in tariffs or something to get it done.”

Before the current TikTok ban reports in the U.S., bipartisan lawmakers pushed through legislation requiring ByteDance to divest its American business by January 19, 2024, but legal and political delays bought the company additional time. 

Fast forward to the recent case, with the April 5 deadline, Trump is betting on a resolution. “There’ll be a deal with TikTok, I’m pretty certain,” he said.