TikTok has signed binding agreements to form a new U.S.-based company, ending years of uncertainty about whether the popular video app could continue operating in the United States. The deal creates a new entity called TikTok USDS Joint Venture LLC and brings in a group of powerful investors to oversee TikTok’s American operations under strict national security terms.
The agreement was confirmed in an internal memo from TikTok CEO Shou Zi Chew and is expected to close on January 22, according to communications reviewed by multiple news organizations.
Who Will Own and Control the New U.S. Entity
The new TikTok U.S. venture will be majority controlled by American investors. Half of the company will be owned by a consortium that includes Oracle, Silver Lake, and Abu Dhabi based investment firm MGX. Each of those three firms will hold a 15 percent stake.
Another 30.1 percent of the company will be owned by affiliates of existing investors in ByteDance, TikTok’s China based parent. ByteDance itself will retain a 19.9 percent ownership stake.
The venture will be governed by a new seven member board of directors, with a majority of seats held by Americans. According to the memo, the board structure and ownership model are designed to meet U.S. national security requirements while allowing the platform to continue operating without disruption for users and advertisers.
The agreement is the result of years of pressure from Washington over concerns that TikTok could be used by the Chinese government to collect data on Americans or influence content through its powerful recommendation algorithm.
In 2024, Congress passed a bipartisan law requiring TikTok to divest its U.S. operations or face an effective ban. The law was signed by President Joe Biden and later upheld by the Supreme Court of the United States in January.
The law required a clean break from ByteDance, especially with respect to data access and algorithm control. When TikTok failed to finalize a deal by the original deadline, the app briefly went dark in the United States.
After returning to office, President Donald Trump issued a series of executive orders delaying enforcement of the ban while negotiations continued. Those extensions created the legal runway needed to finalize the current agreement.
How the New Structure Addresses National Security Concerns
Under the terms of the deal, TikTok’s U.S. operations will operate as an independent company with authority over American data protection, algorithm security, content moderation, and software assurance.
All sensitive U.S. user data will be stored domestically in Oracle managed data centers. Oracle will also serve as the trusted security partner responsible for auditing and validating compliance with national security requirements.
The TikTok recommendation algorithm used in the United States will be retrained using only U.S. user data. According to the memo, this step is intended to ensure the content feed is free from outside manipulation and insulated from foreign influence.
American officials have long warned that TikTok’s algorithm could be vulnerable to pressure from Chinese authorities. By placing algorithm oversight, retraining, and auditing under a U.S. controlled entity, the deal aims to reduce the risk of covert data access or content manipulation.
TikTok says U.S. users will continue to enjoy the same experience they have today. The app’s look, features, and creator tools are not expected to change as a result of the deal. Advertisers will also continue to reach global audiences without disruption.
At the same time, content moderation policies for the U.S. platform will now be set and enforced by the American controlled venture, creating a distinct U.S. version of TikTok alongside the global app operated by ByteDance.
The Stakes for the United States
TikTok has more than 170 million users in the United States, and its influence is especially strong among younger Americans. According to a report from the Pew Research Center, about 43 percent of U.S. adults under 30 say they regularly get news from TikTok, more than from YouTube, Facebook, or Instagram.
That reach is one reason lawmakers from both parties pushed for a deal that would place TikTok’s U.S. operations under domestic control. Supporters of the agreement argue that it preserves a major communication platform while adding meaningful safeguards against foreign surveillance and influence.
An End to Years of Uncertainty
The signing of this deal marks a turning point in a saga that has dragged on for more than five years. While some critics argue the structure does not fully sever ties with ByteDance, the agreement satisfies key elements of U.S. law by shifting control of data, oversight, and operations to a U.S. governed entity.
If the deal closes as expected in late January, TikTok will move forward in the United States under a new corporate structure designed to balance national security concerns with the realities of a global technology platform.
