TikTok and its Chinese parent company, ByteDance, say they have finalized a deal to set up a new, majority American-owned joint venture designed to keep TikTok operating in the United States and avoid a potential ban.
The new entity is described as an independent U.S. version of TikTok that will handle key technology and security functions for American users, including user data and the platform’s recommendation algorithm, with Oracle playing a major role.
A new US entity for TikTok
ByteDance said the joint venture is called TikTok USDS Joint Venture LLC, and it will manage U.S. user data, the app, and the underlying algorithm using what the company described as stronger data privacy and cybersecurity measures.
The deal is a major milestone in a long-running U.S. debate over TikTok and national security that dates back to 2020, when then-President Donald Trump tried to ban the app.
TikTok has said the joint venture structure is meant to protect national security through safeguards that include data protection measures, algorithm security, content moderation, and software guarantees for U.S. users.
Ownership and leadership details
Under the structure described by ByteDance, U.S. and international investors will own 80.1% of the joint venture, while ByteDance will retain 19.9%.
Several outlets described the transaction as a $14 billion deal, with Politico reporting that TikTok said it had closed a $14 billion deal to establish a U.S. subsidiary to avoid a ban.
TikTok said Adam Presser, previously the company’s head of operations and trust and safety, will be the CEO of the TikTok USDS joint venture.
A seven-member board will oversee the venture, and TikTok said the board will be majority American.
CNBC and Politico listed the board members as TikTok CEO Shou Zi Chew, Oracle executive Kenneth Glueck, Timothy Dattels (TPG Global), Mark Dooley (Susquehanna International Group), Egon Durban (Silver Lake), Raul Fernandez (DXC Technology), and David Scott (MGX).
Oracle’s role in data and the algorithm
The company materials described by Politico said the U.S. version will retrain and update the platform’s recommendation algorithm using U.S. user data, and that Oracle will control the algorithm within its U.S. cloud environment.
Silicon Republic also reported that Oracle will control the U.S. TikTok recommendation algorithm and security mechanisms under the deal.
Vice President JD Vance said U.S. owners would control how the algorithm pushes content to users, calling that control an important part of meeting U.S. national security requirements.
TikTok also said “interoperability” will allow U.S. users to keep a global TikTok experience, while U.S. entities of “TikTok Global” will oversee some global product interoperability and certain commercial operations, including e-commerce, advertising, and marketing.
Deadline pressure and China’s stance
The closing came under pressure from U.S. law and executive deadlines that threatened a ban if ByteDance did not divest from TikTok’s U.S. operations.
Yahoo Finance’s summary of the situation said Congress passed a law in April 2024 requiring TikTok to be sold to a U.S. buyer by Jan. 19, 2025, or face a ban, and said Trump postponed implementation of the ban five times last year as talks continued.
CNN reported that the Chinese government had not publicly commented on the final structure of the deal, and said a previous version of the deal was paused last year after Trump announced new tariffs.
Politico reported that Trump said in September that Chinese President Xi Jinping had agreed to the deal, while also noting that China’s public messaging suggested any deal would need to comply with Chinese laws and regulations.
Questions and scrutiny remain
Reuters said ByteDance disclosed few details about how the divestiture works beyond the new joint venture’s role in securing U.S. user data, the app, and the algorithm.
Silicon Republic reported that the joint venture said its goals include protecting the U.S. content ecosystem through a “comprehensive data privacy and cybersecurity programme,” and added that similar safeguards were described as applying to other ByteDance apps such as CapCut and Lemon8, though coverage details were unclear.
Some critics also questioned whether the final structure fully severs ByteDance’s influence, with Politico quoting a policy expert who criticized the deal as failing to meet its stated purpose.
