ByteDance, TikTok's Chinese parent company, signed binding agreements Thursday to spin off its U.S. operations into a new joint venture controlled by American and global investors, averting a potential ban.
The deal creates TikTok USDS Joint Venture LLC, where ByteDance retains a 19.9% minority stake and appoints one of seven board members (with Americans holding the majority). The new entity, valued at around $14 billion, will independently manage U.S. data protection, algorithm security, content moderation, and software assurance.A consortium of new investors holds 50%—including Oracle (led by Trump ally Larry Ellison), private equity firm Silver Lake, and Abu Dhabi-based MGX—each reportedly taking about 15%.
Affiliates of existing ByteDance investors (many U.S.-based) hold the remaining 30.1%.Oracle will act as the trusted security partner, storing U.S. user data in a secure domestic cloud and overseeing compliance. The U.S. algorithm will be retrained using only American data, though ByteDance retains ownership of the core algorithm in China.
The agreement aligns with a September 2025 framework backed by President Trump, who delayed enforcement of a 2024 U.S. law requiring ByteDance to divest at least 80% of U.S. assets or face app store and hosting bans. Trump has repeatedly extended the deadline via executive orders, citing progress toward a deal.
The transaction is expected to close by January 22, 2026, pending U.S. and Chinese regulatory approvals. TikTok CEO Shou Zi Chew described it as ensuring continued access for 170 million U.S. users while protecting national security.
Critics argue the structure doesn't fully sever ties with ByteDance, as the core technology remains in China, potentially allowing ongoing influence. Supporters, including Trump, view it as a practical resolution to years of tensions.