In a move that ends years of legal and political uncertainty, TikTok CEO Chew Shou Zi has told employees that the company has signed a binding agreement to spin off its US operations into a new joint venture controlled by American investors. The deal, backed by US President Donald Trump, averts a US ban on the short-video platform and secures its future for more than 17 crore American users.
The new entity, to be called TikTok USDS Joint Venture LLC, is scheduled to come into effect on January 22. The restructuring is aimed at addressing US national security concerns around data privacy, foreign influence and control over TikTok’s powerful recommendation algorithm.
Under the proposed ownership structure, a consortium of US and allied investors — including Oracle, Silver Lake and Abu Dhabi-based MGX — will together hold 50 percent of the US entity. Affiliates of existing ByteDance investors will own 30.1 percent, while ByteDance itself will retain a 19.9 percent stake, below the threshold that triggers “control” under US law.
In an internal memo, Chew said the US joint venture would take responsibility for data protection, algorithm security, content moderation and software assurance for American users. Oracle will act as the “trusted security partner”, auditing and validating compliance with national security requirements once the transaction is completed.
As part of the arrangement, ByteDance will license its recommendation technology to the US entity. The algorithm will be retrained using US user data and secured by Oracle, with TikTok claiming this will ensure the content feed is insulated from outside manipulation.
However, questions remain over who ultimately controls the algorithm. Analysts have pointed out that while retraining on US data addresses some concerns, ownership and licensing terms will be critical in determining real independence from ByteDance and Beijing.
The agreement follows a long standoff after the US Congress passed a sale-or-ban law in 2024, citing fears that TikTok could be used by China for surveillance or influence operations. While critics continue to push for zero Chinese ownership, the proposed deal appears to meet the legal requirements and, for now, keeps TikTok online in the US.
