TikTok has secured its future in the United States after closing a deal that places control of its U.S. operations under a new, majority American-owned company. The agreement keeps the app available while introducing structural, data, and governance changes for its 200 million U.S. users.
The TikTok app logo as the platform secures its future in the United States under a new ownership structure. (Source: Pexels)
Deal Establishes New U.S.-Controlled Entity
TikTok confirmed that a separate business now owns and operates the platform in the United States. The new company is called TikTok USDS Joint Venture LLC.
The entity is governed by a seven-member board, with a majority of American directors. TikTok chief executive Shou Zi Chew will serve as one of the directors.
TikTok chief executive Shou Zi Chew will serve on the board of the new U.S. joint venture. (Source: Bloomberg)
ByteDance, TikTok’s Chinese parent company, will retain a 19.9 percent stake. Most ownership will be held by U.S. and allied investors.
Oracle and Silver Lake are leading investors in the joint venture. UAE-based investment firm MGX also holds a major stake.
The deal closed on Thursday after months of negotiations. It follows a 2024 U.S. law requiring TikTok’s sale or ban.
Algorithm Control and Oracle’s Expanded Role
TikTok’s recommendation algorithm will now be licensed to Oracle. The software determines what videos appear on the app’s For You feed.
Oracle already oversees U.S. user data under a prior security arrangement called Project Texas. The company will now take on additional responsibilities.
Oracle will host TikTok’s U.S. user data and retrained recommendation algorithm in its secure cloud environment. (Source: Bloomberg)
Under the new structure, Oracle will retrain and update the algorithm using U.S. user data. That version will operate within Oracle’s cloud environment.
TikTok said both the algorithm and user data will be protected in Oracle’s secure U.S. cloud. The company framed the move as a data security safeguard.
However, questions remain about compliance with the 2024 law. That statute restricts ongoing cooperation between ByteDance and TikTok’s U.S. operations.
App Access and User Experience Expectations
TikTok has indicated that U.S. users will not need to download a new app. The platform aims to avoid major disruption.
The United States is TikTok’s largest global market, with about 200 million users. Maintaining continuity remains a priority.
Analysts have warned that forcing users to migrate could drive people toward competitors. Instagram Reels and YouTube Shorts are expanding.
Jasmine Enberg, co-CEO of media company Scalable, said TikTok is likely reassuring advertisers behind the scenes. Brand partners seek stability.
She said changing the app too much could deter users and advertisers. Maintaining business as usual appears central to the strategy.
Updated Terms of Service for U.S. Users
TikTok updated its terms of service for U.S. users as the deal closed. The contract now applies between users and TikTok USDS Joint Venture.
One new rule restricts children under 13 to TikTok’s “Under 13 Experience.” The company reinforced age-based usage requirements.
Another clause states that the new U.S. entity does not endorse any content. It says the posted material does not reflect company views.
Users continuing after January 22 must accept new generative AI limitations. The terms warn of potentially inaccurate or unlawful content.
The agreement states that users assume risks when using AI-enabled features. TikTok said this language reflects evolving platform tools.
How the Algorithm May Change
TikTok confirmed that its algorithm will be retrained using U.S. user data. The change could alter content recommendations.
The company has not specified when visible changes might occur. It also has not outlined what features may be adjusted.
Dr. Kokil Jaidka of the National University of Singapore said changes could be subtle and gradual. She expects weaker personalization.
She added that core features like short videos and livestream shopping may remain unchanged. Influencer culture is also expected to continue.
Jaidka said licensing the algorithm could limit update frequency. Constraints may affect how global feedback loops influence recommendations.
Global Content and Cross-Border Reach
TikTok said the U.S. joint venture will maintain compatibility with global systems. The company promised a continued global experience.
The press release stated that U.S. creators will remain discoverable abroad. Businesses will also keep their international reach.
However, the company did not confirm whether U.S. users will see the same level of global content. That remains uncertain.
Dr. Jaidka said data separation could affect content ranking and moderation. Cross-regional learning may become less influential.
She added that much depends on how ByteDance manages oversight mechanisms. Performance degradation remains a risk.
Governance, Security, and Legal Questions
The deal gives American investors more than 80 percent ownership. Oracle and Silver Lake hold leading positions.
Other investors include Dell Family Office and Susquehanna International Group affiliate Vastmere Strategic Investments.
U.S. user data will be stored in Oracle’s cloud. TikTok said the data program will undergo third-party cybersecurity audits.
U.S. lawmakers are expected to review whether the TikTok deal complies with the 2024 law. (Source: washington)
A White House official said the deal resolves national security concerns. ByteDance’s reduced stake was cited as a safeguard.
However, congressional Republicans have vowed to review the agreement. Lawmakers want confirmation that the deal meets legal standards.
Chris Krebs, former CISA director, questioned whether licensing the algorithm gives ByteDance leverage. Control remains a central issue.
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CapCut, Lemon8, and Related Apps
The deal also affects ByteDance’s other U.S. apps. CapCut and Lemon8 will remain available.
Both apps briefly went dark in January 2025 during TikTok’s temporary ban. Their future was uncertain at the time.
TikTok said safeguards under the joint venture will cover those platforms. Data protection measures will extend to sister apps.
The company framed the move as a comprehensive U.S. security framework. It said the same standards will apply across products.
The agreement secures continued access for millions of American users. Structural changes now define TikTok’s U.S. operations.
Further regulatory reviews are expected. For now, the platform remains active under its new ownership structure.
