TikTok and its Chinese parent ByteDance have finalized a deal to restructure the app’s U.S. operations under a new entity that places majority control with American investors, including Oracle, Silver Lake and MGX, allowing the platform to continue operating in the United States.
The move comes after years of political and legal pressure from U.S. lawmakers and regulators who argued that Chinese ownership posed national security and data privacy risks for American users.
New Structure, New Owner Group
Under the agreements announced this week, TikTok’s U.S. operations will be housed in a new company called TikTok USDS Joint Venture LLC.
Three managing investors Oracle Corporation, private equity firm Silver Lake Management LLC, and Abu Dhabi–based investor MGX will each hold 15 percent stakes in the new joint venture, giving them a combined 45 percent ownership.
In addition, affiliates of existing ByteDance investors are set to hold approximately 30.1 percent, while ByteDance itself will retain a 19.9 percent stake just below the legal threshold that the U.S. government requires for divestiture under national security law.
Why the Deal Was Made
The restructuring is aimed at complying with the Protecting Americans from Foreign Adversary Controlled Applications Act, a United States federal law passed in 2024 that required certain foreign-controlled applications, including TikTok, to divest or face an effective ban from U.S. app stores and services.
Earlier legal challenges to the law were affirmed by the U.S. Supreme Court, which upheld the statute’s constitutionality in litigation brought by TikTok and others as TikTok, Inc. v. Garland.
The deal is also backed by multiple executive orders signed by President Donald Trump in 2025, which have repeatedly postponed enforcement of a potential ban to allow negotiations and approvals for a U.S.-based solution.
Executive Leadership and Governance
A newly constituted seven-member board of directors will govern the joint venture, with a majority of its members being U.S. citizens.
Shou Zi Chew, TikTok’s global chief executive officer, wrote in an internal memo that the joint venture built on TikTok’s existing U.S. Data Security (USDS) organization will operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation and software assurance.
Data, Algorithms and User Experience
Under the terms of the agreements, all U.S. user data will be stored locally in systems run by Oracle, which is also designated as the trusted technology and security partner for the joint venture.
The joint venture will be responsible for retraining TikTok’s recommendation algorithm using U.S. user data to ensure the content feed is independent from foreign influence.
TikTok’s internal communication materials also confirmed that content moderation decisions affecting U.S. users will be controlled by the venture, a major component in addressing policy concerns previously cited by government officials.
Commercial and Global Functions
Despite the change in operational control for sensitive functions, TikTok global’s U.S. entities will continue to handle global product interoperability and certain commercial activities, including e-commerce, advertising and marketing, the internal memo said.
This approach is intended to preserve the app’s appeal to advertisers and creators while meeting regulatory requirements at the same time.
