TikTok's Chinese owner, ByteDance, has finalised a deal to establish a majority American-owned joint venture that will secure US data, to avoid a ban by Washington on the short video app used by more than 200 million Americans.

The deal is a milestone for the social media firm after years of battles that began in August 2020 when US President Donald Trump tried to ban the app over national security concerns.

ByteDance said TikTok USDS Joint Venture LLC would secure US user data, apps and algorithms through data privacy and cybersecurity measures. It disclosed few details about the divestiture.

Trump praised the deal in a ⁠social media post saying TikTok "will now be owned by a group of Great American Patriots and Investors, the Biggest in the World."

He thanked President Xi Jinping "for working with us and, ultimately, approving the Deal. He could have gone the other way, but didn’t, and is appreciated for his decision."

The agreement provides for American and global investors to hold 80.1 percent of the venture while ByteDance will own 19.9 percent.

TikTok USDS JV's three managing investors – cloud computing giant Oracle, private equity group Silver Lake and Abu Dhabi-based investment firm MGX – will each hold 15 percent.

Trump has more than 16 million followers on his personal TikTok account and credited the app with helping him win reelection. He received a document from TikTok on December 22 touting how popular he is on the app, showed a ⁠photo published this month by the New York Times. The White House also launched an official TikTok account in August.

TikTok said investors in the venture include Dell Family Office – investment firm of Dell Technologies founder Michael Dell – plus Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.

Former TikTok USDS figures Adam Presser and Will Farrell have been appointed chief executive and chief security officer, respectively.

TikTok CEO Shou Zi Chew was also named to the venture's board; he leads TikTok's global businesses‍ and strategy.

The venture will retrain, test and update TikTok's content recommendation algorithm on US user data and the algorithm will be secured in Oracle's US cloud, TikTok said. (Reuters)