WASHINGTON, Jan 23, 2026, 08:16 EST
- ByteDance announced that TikTok’s U.S. operations will shift to a new joint venture majority-owned by Americans to prevent a ban
- Oracle, Silver Lake, and Abu Dhabi’s MGX will each take a 15% share; ByteDance holds onto 19.9%
- The venture will house U.S. user data on Oracle’s U.S. cloud and oversee the security of TikTok’s algorithm
ByteDance announced it has sealed a deal to form a new joint venture, majority-owned by Americans, aimed at safeguarding TikTok’s U.S. user data and ensuring the app continues running in the States. Reuters
This shift is crucial because TikTok faced a stark choice under U.S. law: either sell a substantial portion of its U.S. operations to sever Chinese ownership or risk a total ban across the country. The app claims it connects with over 200 million Americans and serves millions of U.S. businesses for marketing and sales.
For Washington, this is a real-world trial to see how aggressively the U.S. can enforce “data security” rules on a consumer app without shutting it down completely. Advertisers, creators, and competitors who have invested years developing TikTok-style video feeds will be paying close attention to the results.
The company said American and global investors will now control 80.1% of the venture, while ByteDance keeps 19.9%. Oracle, private equity firm Silver Lake, and Abu Dhabi-based MGX are named the three “managing investors,” each holding a 15% stake.
TikTok announced that Adam Presser, previously a senior exec in its U.S. data security team, will take the helm as CEO of the new company. Will Farrell is stepping in as chief security officer. Meanwhile, TikTok’s CEO Shou Chew will join the board of the new venture.
TikTok USDS Joint Venture LLC announced its mission to protect U.S. user data, apps, and algorithms. The plan involves a data privacy and cybersecurity program running on Oracle’s secure U.S. cloud, with oversight from third-party cybersecurity auditors. Tiktok
According to the company’s release and related reports, the joint venture’s protections will extend to ByteDance-owned apps like CapCut and Lemon8. It plans to match key security benchmarks, including NIST (U.S. government cybersecurity guidelines) and ISO 27001 (an international info security standard). The venture will also hold decision-making power over trust and safety policies as well as content moderation within the U.S. Theverge
A White House official told Reuters that both the U.S. and Chinese governments approved the deal, though the Chinese embassy in Washington hasn’t yet responded. President Donald Trump took to social media to praise the agreement, tweeting that TikTok “will now be owned” by American investors and thanking China’s President Xi Jinping for giving the green light.
The deal puts an end to a fierce, years-long battle starting in 2020, when Trump, during his first term, pushed to ban TikTok citing national security risks. In April 2024, a law mandated ByteDance to sell off its U.S. operations or face a ban, a move the Supreme Court later upheld.
Still, the arrangement leaves some big questions unanswered—and those could resurface quickly. Neither the new company nor ByteDance has shared key commercial details. Regulators will be scrutinizing how the U.S. side keeps the recommendation algorithm—the engine deciding which videos show up—free from foreign control. “Who controls TikTok in the U.S. has a lot of sway over what Americans see on the app,” noted Anupam Chander, a Georgetown law and technology professor. Apnews
There’s also a market risk here: retraining the recommendation engine on U.S. data might shift what users encounter and impact ad conversion rates. That could drive creators and brands to experiment with alternatives like Meta’s Instagram Reels or Alphabet’s YouTube Shorts. TikTok said it plans to maintain a “global” experience via interoperability but will keep certain commercial functions, like e-commerce and advertising, under distinct U.S. entities connected to TikTok’s worldwide operations.
ByteDance has shared limited information on valuation and deal specifics. According to Reuters, the U.S. venture will manage sensitive backend tasks such as U.S. user data and the algorithm. Meanwhile, a ByteDance-owned unit will keep handling revenue-generating activities, with the new venture taking a cut of the revenue for providing technology and data services.
