TikTok has closed a landmark deal to split its U.S. operations from its global business, ensuring the short-video app remains accessible to millions of American users. The agreement, announced on Thursday, resolves a protracted standoff between Washington and Beijing over national security fears tied to the app’s Chinese ownership.
The conflict dates back to the Trump administration’s initial attempts to ban TikTok in 2020, citing concerns that Beijing could access U.S. user data. Under President Joe Biden, legislation was passed in 2024 mandating that TikTok’s parent company, ByteDance, sell its U.S. operations or face a ban. This led to legal battles and a temporary shutdown of the app in January 2025, which was quickly reversed after President-elect Donald Trump intervened.
Under the new arrangement, a joint venture named TikTok USDS Joint Venture LLC will oversee U.S. operations. The venture is governed by a seven-member board with a majority of American directors, and it has appointed Adam Presser, a former WarnerMedia executive, as its chief executive. Key investors include Oracle, Silver Lake, and MGX, each holding a 15% stake, while ByteDance retains a 19.9% interest.
A critical component of the deal is the handling of TikTok’s algorithm, often called its “secret sauce” for driving user engagement. The algorithm has been licensed to the U.S. owners and will be retrained exclusively on American user data, housed in Oracle’s secure cloud environment. This move aims to address data privacy concerns while maintaining the app’s functionality.
For the approximately 200 million U.S. TikTok users, experts predict that the changes could result in a slower or differently performing app. The algorithm may not recommend content as effectively as before, potentially altering the user experience. However, the full impact remains uncertain and will unfold over time.
The deal has significant political undertones, with President Trump expressing support on social media, stating he was “so happy to have helped in saving TikTok.” Investors like Oracle’s Larry Ellison and others have close ties to Trump, highlighting the interplay between technology and politics in this resolution.
Looking ahead, the joint venture will implement enhanced data privacy and cybersecurity measures to secure U.S. user information. TikTok’s global boss, Shou Zi Chew, will remain on the board, ensuring some continuity. The agreement sets a precedent for how international tech firms navigate U.S. regulatory pressures, balancing security with innovation.
In conclusion, this deal not only averts a ban but also reshapes TikTok’s future in the U.S., with implications for data governance and global tech competition. As the new structure takes effect, stakeholders will closely monitor its effects on both users and the broader digital landscape.
