TikTok Creates American Entity with Independent Data Protection Architecture

TikTok confirmed Thursday that it has finalized an ownership restructuring establishing a majority American-owned entity featuring an independent data protection architecture designed to physically and technically separate American user data from foreign access. The agreement emphasizes infrastructure-level security.
ByteDance, the Beijing-based technology company behind TikTok, has agreed to reduce its ownership stake to 19.9% in the American entity, while US investors control 80.1%. The American ownership group includes Oracle with 15%, bringing significant cloud infrastructure capabilities; Silver Lake with 15%; and MGX with 15%. Michael Dell’s investment firm also participates.
The deal addresses bipartisan legislation enacted in 2024 that effectively banned TikTok unless it separated from Chinese ownership, with particular concern about physical and technical access to American user data. Lawmakers worried that foreign ownership could facilitate data exfiltration regardless of policy commitments. The law contemplated structural protections preventing unauthorized access.
Leadership of the American entity will fall to Adam Presser as CEO, with oversight from a seven-member board of directors with an American majority and cybersecurity experts who can evaluate data protection architecture. Shou Chew will participate as a board member.
The new US entity commits to implementing comprehensive data protection that goes beyond policy to infrastructure, creating independent systems for American user data that are physically and technically separated from foreign access. Oracle’s participation enables robust cloud infrastructure supporting this independent architecture. Additional safeguards include secured algorithms operating independently, enhanced content moderation, and software integrity assurances. The platform’s recommendation algorithm undergoes complete retraining using exclusively the independently-protected US user data. Both governments have approved the arrangement, with President Trump thanking Chinese President Xi Jinping for facilitating the infrastructure-focused deal.