- ByteDance finalizes TikTok U.S. deal involving Oracle, Silver Lake, and MGX.
- U.S. entity to gain control over data, moderation, and algorithms to ensure security.
- Deal closes Jan 22, 2026, keeping the app accessible to 170M+ U.S. users.
TikTok's Chinese parent company, ByteDance Ltd., has reached a formal agreement for reorganizing its U.S. operations. This move indicates a turning point following years of political and regulatory scrutiny in Washington. As per internal communications from CEO Shou Zi Chew, cited by various industry reports, the U.S. firm will be reconstituted as a fresh joint venture led by a "seven-member majority-American board of directors." The change reportedly aims to address national security issues while keeping the popular app available to U.S. consumers.
TikTok USDS Joint Venture LLC will have well-known technology and investment organizations backing it. The organizations, namely, Oracle Corp., Silver Lake, and Abu Dhabi's MGX, will hold around 45% of the venture, which is 15% each. ByteDance will retain around 19.9%, with the rest of the portion held by affiliates of previous investors.
The deal is set to close on January 22, 2026, in accordance with timelines set under U.S. law that warned of a ban on TikTok if ByteDance failed to divest control of its American operations. Over 170 million U.S. users utilize the app regularly, providing relief to creators, advertisers, and legislators who were concerned about disruption.
TikTok U.S. Data Security Concerns & Algorithm Control
TikTok data security and algorithm control are two key components of the agreement. The U.S. body will be in charge of data protection, content moderation, algorithm security, and software assurance, with Oracle serving as a "trusted security partner" to manage user data storage and compliance processes.
The algorithm that drives TikTok's suggestion system will be retrained using U.S. user data to make sure that content recommendations are free of foreign influence. This is because, under Chinese law, Beijing controls the export of algorithms. The dragon country's cyber security body earlier stated that it had agreed on a framework for the TikTok agreement, which includes "licensing the algorithm and other intellectual property rights" to the United States.
While many in the technology and business sectors have praised the deal, several lawmakers and analysts have criticized it. They object to ByteDance's staying power and express alarm about the growing concentration of media assets in the hands of a few tech billionaires.
As noted by the Financial Times, Jim Secreto, a former U.S. Treasury official involved in overseeing TikTok during the Biden administration, said, "What was announced looks more like a franchise arrangement than a true divestiture." Nonetheless, it marks a significant turning point in US-China technology relations and brings an end to a conflict that has been ongoing since 2020.
