TikTok’s Chinese parent company, ByteDance, has signed binding agreements to transfer control of the popular short-video app’s U.S. operations to a consortium of investors, including Oracle, Silver Lake, and MGX, marking a major step toward avoiding a potential U.S. ban. The move aims to address longstanding national security concerns and ensure that U.S. user data remains protected under American oversight.

Details of the TikTok U.S. Joint Venture

Under the deal, the newly formed TikTok USDS Joint Venture LLC will be majority-owned (80.1%) by U.S. and global investors, while ByteDance will retain a 19.9% minority stake. The new venture will manage the app’s data, algorithm security, content moderation, and software assurance, operating independently from ByteDance’s revenue-generating divisions, which will handle e-commerce, advertising, and marketing.

TikTok CEO Shou Zi Chew emphasized that the joint venture will have full authority over U.S. user data, ensuring compliance with local privacy regulations. Meanwhile, ByteDance will maintain ownership of the company’s commercial operations, generating revenue from e-commerce and advertising while sharing a portion of profits with the joint venture for technology and data services.

The U.S. company’s valuation is estimated at $14 billion, according to Vice President JD Vance, though final financial details were not disclosed. Oracle will serve as the trusted security partner, auditing and validating compliance with U.S. data protection standards and hosting sensitive information on a secure cloud infrastructure.

Background: TikTok and U.S. National Security

The deal addresses a multiyear conflict over TikTok’s U.S. operations, which began in August 2020 when former President Donald Trump first attempted to ban the app over concerns that the Chinese government could access American user data. Since then, TikTok has faced legal battles and political scrutiny, delaying divestiture negotiations and fueling uncertainty over its operations in the U.S.

The new agreement is designed to satisfy U.S. government requirements under a 2024 law mandating that ByteDance cede control of TikTok’s American operations. The joint venture will function as a backend operations hub, managing U.S. user data and algorithmic processes independently of ByteDance’s commercial activities.

Political Reactions

The deal has drawn mixed reactions. Former President Donald Trump, who has more than 15 million followers on TikTok, has credited the platform for helping him politically and reportedly supported the investor consortium. Meanwhile, Senator Elizabeth Warren criticized the deal, warning that it could give billionaire investors disproportionate influence over what Americans see on the app.

Observers have raised questions regarding ByteDance’s ongoing role in TikTok’s operations, particularly concerning algorithm ownership and potential oversight by Beijing. Experts note that while the joint venture will monitor U.S. data, ByteDance will retain substantial influence over commercial revenue-generating activities, including advertising and e-commerce.

Timeline and Next Steps

The joint venture deal is set to close on January 22, 2026, formally concluding years of U.S. efforts to force ByteDance to divest its American operations. Lawmakers, including Representative John Moolenaar, have indicated that the leadership of the new TikTok entity will appear before Congress in 2026 to address ongoing regulatory and national security concerns.

TikTok’s move to form a U.S.-controlled joint venture represents a critical compromise to secure the app’s future in America, protect user data, and maintain its position as one of the most widely used social media platforms in the country, with over 170 million U.S. users.