Maya Robertson
TikTok may soon sidestep its looming U.S. shutdown with a new ownership deal and an American-only version of the app, as the company races to comply with the Protecting Americans from Foreign Adversary Controlled Applications Act.
According to a new report from The Information, TikTok’s parent company ByteDance is close to finalizing a sale agreement with a group of U.S.-based investors — a plan designed to satisfy national security concerns by limiting Chinese ownership of the wildly popular video platform. The proposed deal would reportedly see Oracle and other “non-Chinese” investors take control, while ByteDance retains a minority stake that meets the requirements of the new law.
The Chinese government’s approval is still required for any final transaction, and the algorithm that powers TikTok’s addictive feed remains a key sticking point. Beijing has long opposed exporting the proprietary recommendation system, which has been central to TikTok’s global success.
To meet the U.S. legal deadline, TikTok’s team is developing a separate version of the app, internally called “M2.” According to sources, the new app is planned for release in U.S. app stores on September 5th, aligning with the expiration of a recent executive order extension that pushed back the ban deadline.
Under the plan, American users will eventually be required to download M2 to keep using TikTok’s services. The original app would be removed from U.S. app stores once M2 goes live and stop functioning entirely by March 2026.
While details remain limited, the M2 app is expected to operate independently from ByteDance’s main TikTok platform outside the U.S., allowing the company to maintain its algorithm elsewhere while complying with stricter U.S. data and ownership rules. Whether the new version can retain the same level of engagement without full access to the core algorithm remains to be seen.
TikTok has faced years of political scrutiny in the U.S. over data privacy, national security, and foreign influence concerns. The “divest-or-ban” legislation, which took effect in January, left the company with few choices: find a U.S.-approved buyer or shut down operations nationwide.
So far, enforcement has been inconsistent — the app was taken offline for only one day since the law went live — but pressure has grown as President Trump, who signed the current executive orders, insists on finalizing the sale ahead of the September deadline.
Trump recently told reporters he has secured a “group of very wealthy people” ready to buy the U.S. operations. Meanwhile, Oracle, a longtime TikTok partner, has reportedly struck a separate deal with the federal government for discounted cloud infrastructure services, possibly smoothing the path for its expanded role in the TikTok transaction.
If the proposed deal and the M2 app launch go as planned, TikTok’s tens of millions of U.S. users may see minimal disruption — assuming the spin-off retains the addictive feed and viral video discovery that made the app a cultural phenomenon.
But with lingering questions around algorithm access and government sign-off, TikTok’s future in the U.S. still hangs in the balance. The next two months will determine whether the world’s most watched short-form video app remains online for American users — or splits off into something new.
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