ByteDance signs deal to create TikTok US joint venture

TikTok’s Chinese owner, ByteDance, has signed binding agreements with three major investors to form a new joint venture that will operate TikTok’s US app, a move aimed at averting a long-threatened ban by the US government.

The agreement marks a major step toward resolving years of regulatory and political uncertainty surrounding one of the most widely used social media platforms in the United States.

The deal comes after prolonged efforts by US lawmakers and successive administrations to force ByteDance to divest TikTok’s US operations over national security concerns related to data and algorithm control.

TikTok is used regularly by more than 170 million Americans.

Ownership structure and investor role

Under the agreement, American and global investors will hold an 80.1% stake in the new entity, while ByteDance will retain a 19.9% minority interest following its divestiture.

The joint venture will be named TikTok USDS Joint Venture LLC.

According to a memo from TikTok CEO Shou Zi Chew to employees seen by Reuters, three managing investors—Oracle, Silver Lake, and Abu Dhabi-based MGX—have signed binding agreements with ByteDance and TikTok.

These three firms will collectively own 45% of the new venture, with each holding a 15% stake.

A further 30.1% will be held by affiliates of certain existing ByteDance investors.

Chew said the joint venture will operate as an independent entity with authority over US data protection, algorithm security, content moderation, and software assurance.

ByteDance will appoint one of seven board members, with Americans holding the majority of board seats.

Regulatory background and political context

The agreement aligns with the outline of a deal unveiled in September, when President Donald Trump delayed enforcement of a 2024 law requiring TikTok to stop operating in the US unless ByteDance divested its American assets.

Trump stated that the proposed structure met divestiture requirements.

Trump has credited TikTok with helping him win reelection and has more than 15 million followers on the platform.

The White House launched an official TikTok account in August, underscoring the app’s political relevance.

Despite the progress, some lawmakers remain skeptical.

Democratic Senator Elizabeth Warren said there were unresolved questions, accusing Trump of facilitating what she called a “billionaire takeover” of TikTok.

Republican Representative John Moolenaar, who chairs the House Select Committee on China, previously said he plans to host the leadership of the new TikTok entity at a hearing in 2026.

Data security and operational control

Data protection has been a central issue in negotiations.

Oracle will serve as TikTok US’s “trusted security partner,” responsible for auditing and validating compliance, including safeguarding sensitive US user data.

That data will be stored in a secure cloud environment operated by Oracle within the United States.

Trump’s September order stipulated that TikTok’s algorithm would be retrained and monitored by US security partners and placed under the control of the new joint venture.

While the US entity will oversee core security and moderation functions, TikTok Global’s US entities will continue to manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing.

Analysts expect the deal to clear remaining approvals, potentially closing a chapter in one of the most closely watched technology and national security disputes in recent years.

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