TikTok Reaches Deal to Shift US Control Away From ByteDance
After years of political pressure and legal uncertainty, TikTok’s future in the United States has taken a decisive turn.
ByteDance, the Chinese company behind the short-form video platform, has signed binding agreements that shift control of TikTok’s U.S. operations to a new investor-led structure, marking the strongest move yet toward averting a nationwide ban.
Key takeaways:
- ByteDance has agreed to hand control of TikTok’s U.S. operations to a new joint venture.
- U.S. and global investors will hold a majority stake, while ByteDance retains a minority interest.
- The deal aims to satisfy U.S. national security concerns and prevent a forced ban.
- Oracle will play a central role in data security and regulatory compliance.
The agreement restructures TikTok’s American business under a newly created entity called TikTok USDS Joint Venture LLC. Under the proposed ownership model, American and international investors — including Oracle, Silver Lake and Abu Dhabi-based MGX — will collectively control just over 80 percent of the venture. ByteDance’s stake will be capped below 20 percent, aligning with the thresholds set by U.S. lawmakers.
Although the financial terms have not been publicly disclosed, U.S. officials previously suggested the new entity could carry a valuation of around $14 billion. Investors appeared encouraged by the development, with Oracle shares climbing sharply in premarket trading following the announcement.
A Deal Shaped by Years of Political Pressure
The agreement brings closure to a dispute that has stretched back to 2020, when U.S. officials first raised alarms about data security and potential foreign influence over the app. Those concerns ultimately culminated in legislation passed in 2024 that required ByteDance to relinquish control of TikTok’s U.S. business or face a ban. Enforcement was delayed multiple times as negotiations continued.
How the New TikTok Structure Will Operate
According to an internal memo circulated to U.S. employees, the joint venture will function as an independent entity with authority over user data protection, algorithm safeguards, content moderation and software security. Oracle has been designated as the platform’s “trusted security partner,” responsible for hosting U.S. user data on domestic cloud infrastructure and overseeing compliance audits.
Ongoing Questions Around Control and Influence
Despite these assurances, the structure of the deal has left lingering uncertainty. ByteDance-controlled entities are expected to continue managing global product compatibility and commercial operations such as advertising, marketing and e-commerce. That split has prompted debate over how much influence ByteDance may still exert over TikTok’s core technology.
Former national security officials have pointed out that it remains unclear whether TikTok’s recommendation algorithm has been fully transferred, licensed or simply overseen by U.S. partners. Earlier reporting suggested the joint venture would control U.S. data and algorithm operations, while revenue-generating activities would remain under ByteDance ownership, with the new entity receiving compensation for technical and data services.
Political reactions have been divided. Supporters of the deal argue it strikes a balance between national security safeguards and continued access to a platform used by more than 170 million Americans. Critics, however, say the arrangement lacks transparency and may concentrate control over online content in the hands of a small group of wealthy investors.
President Donald Trump, who once pushed for TikTok’s ban but later credited the platform with boosting his political reach, previously signaled support for the framework. His personal ties to Oracle founder Larry Ellison have also drawn attention, particularly as Ellison-backed ventures pursue broader media investments.
The transaction is expected to close on January 22. If finalized, it would conclude one of the most prolonged regulatory battles in the tech sector and establish a precedent for how foreign-owned digital platforms operate under U.S. oversight.
Even so, scrutiny is unlikely to fade. Lawmakers have already indicated that congressional hearings could follow in the coming years, underscoring that while TikTok may have avoided an immediate ban, debate over its governance and influence in the United States is far from settled.
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