TikTok has finalized a deal to separate its US operations from its global business, resolving years of national security concerns and averting a potential ban that threatened its American market presence. Announced on January 23, 2026, this agreement ensures the short-video platform remains accessible to over 200 million US users and 7.5 million businesses, marking a critical turning point in a protracted legal and political saga.
The deal establishes TikTok USDS Joint Venture LLC, a new entity with majority-American ownership, involving key investors like Oracle, Silver Lake, and MGX, each holding a 15% stake. Chinese parent company ByteDance retains a 19.9% share, while the remaining ownership is distributed among firms such as the Dell Family Office and Vastmere Strategic Investments. This structure aims to address Washington’s fears over data security, though TikTok and ByteDance have consistently denied any risks of Chinese government access to US user data.
A pivotal aspect of the agreement is the handling of TikTok’s algorithm, often called the “secret sauce” for its content recommendation prowess. To comply with US regulations, the algorithm will be licensed to the joint venture and retrained exclusively on American user data, secured within Oracle’s US cloud environment. Experts suggest this could lead to changes in app performance, potentially making it slower or less effective compared to the global version, though the full impact on user experience remains unclear.
President Donald Trump played a central role in facilitating the resolution, having repeatedly postponed enforcement of a ban that was initially mandated under legislation signed by Joe Biden. In September 2025, Trump announced a preliminary agreement with China, and he recently expressed satisfaction with the final deal on social media, stating he was “so happy to have helped in saving TikTok.” The White House had long pressured TikTok to divest from Chinese control, citing national security threats as the primary driver.
For US users and businesses, the deal guarantees continuity without interruption, but it introduces uncertainties regarding content delivery and app functionality. The new joint venture will be governed by a seven-member, majority-American board, led by CEO Adam Presser and including executives from Oracle, Silver Lake, MGX, and TikTok’s global CEO Shou Zi Chew, aiming to balance compliance with operational expertise.
This agreement underscores the escalating tech tensions between the US and China, where apps like TikTok become focal points in broader geopolitical rivalries. It sets a precedent for how Chinese-owned companies might navigate similar challenges in Western markets, potentially requiring structural separations to meet local regulatory demands.
Moving forward, TikTok must implement the technical safeguards and data protocols outlined in the deal, with ongoing audits and third-party certifications to verify security. While the immediate threat of a ban is eliminated, the company faces the challenge of maintaining its viral appeal and competitive edge amidst these operational shifts, which could influence its global ambitions and market strategy.
