Historic Agreement Secures TikTok's U.S. Future
TikTok has officially finalized an agreement to form a new U.S. unit, the TikTok USDS Joint Venture LLC, ensuring its continued operation in the United States. The deal, which concluded on January 22, 2026, involves significant investments from major American firms Oracle, Silver Lake, and MGX. This development marks a resolution to years of regulatory uncertainty and national security concerns surrounding the popular social media platform's Chinese ownership.
New Ownership Structure and Leadership
Under the terms of the agreement, American entities, including the new investors and affiliates of existing ByteDance investors, will collectively hold an 80.1% stake in the new joint venture. Cloud computing giant Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX will each hold a 15% stake, serving as managing investors. TikTok's parent company, ByteDance, will retain the remaining 19.9%.
The newly formed entity will be led by Adam Presser, formerly TikTok's head of operations and trust and safety, who will serve as its CEO. A seven-member board of directors, with a majority of American members, will govern the joint venture, including TikTok's global CEO Shou Chew.
Addressing National Security and Data Privacy
The establishment of the TikTok USDS Joint Venture LLC is a direct response to long-standing U.S. government scrutiny and the threat of a nationwide ban due to concerns over potential data access by the Chinese government. The new unit is designed to operate under 'defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users.'
A critical component of this deal is Oracle's role as the primary data security partner. Oracle will be responsible for managing TikTok's U.S. user data and controlling the platform's content recommendation algorithm and security mechanisms within a domestic cloud environment. This initiative is part of a broader effort known as 'Project Texas,' which involves a $1.5 billion investment to create a 'firewall' for U.S. user data, ensuring it is stored on American soil and overseen by American personnel.
Years of Regulatory Scrutiny Culminate in Agreement
The finalization of this deal brings an end to a period of intense regulatory pressure that began in August 2020. Both the Trump and Biden administrations had cited national security concerns, leading to executive orders and legislation, including the 'Protecting Americans from Foreign Adversary Controlled Applications Act,' which mandated a divestiture or ban of the platform in the U.S. This agreement allows TikTok to continue serving its more than 200 million U.S. users and 7.5 million businesses.
5 Comments
Muchacha
Good for small businesses that rely on the platform. Stability is key.
Bella Ciao
American investment and control means a win-win. Smart move.
Comandante
It's good that a ban was avoided, preserving the platform for millions of users and businesses. However, the extensive 'Project Texas' investment highlights just how difficult it is to fully disentangle from foreign influence while maintaining functionality.
Bermudez
While the new U.S. ownership structure is a positive step for data security, the fact that ByteDance retains a stake still leaves room for suspicion among some users. It's a complex solution to a complex problem.
Africa
19.9% Chinese ownership is still too much. The threat isn't gone.