TikTok announced the closure of a joint venture for its U.S. operations on January 23, 2026, with U.S. and global investors including Oracle, Silver Lake, and MGX holding an 80.1% stake and parent ByteDance retaining 19.9%. Valued at $14 billion, the TikTok USDS Joint Venture aims to protect American user data and the platform's algorithm in Oracle's U.S. cloud, addressing years of national security worries. The deal drew praise from President Trump but skepticism from lawmakers on remaining Chinese influence.
The joint venture, structured to keep ByteDance's ownership below the 20% U.S. legal threshold, will manage U.S. user data protection, content recommendation algorithms, and related operations. Data and algorithms will be stored in Oracle's secure U.S. cloud infrastructure, with retraining, testing, updates, and audited third-party-certified privacy/cybersecurity programs compliant with U.S. regulations. It will also handle content moderation for TikTok and apps like CapCut and Lemon8, while promising interoperability for global content access.
This follows years of regulatory battles starting in August 2020, when the U.S. sought to ban TikTok over national security risks linked to ByteDance. The arrangement echoes the prior Project Texas plan but complies with the Protecting Americans from Foreign Adversary Controlled Applications Act mandating divestiture. ByteDance retains oversight of the core algorithm, e-commerce, advertising, and marketing.
The seven-member board is majority American, featuring TikTok CEO Shou Zi Chew (for ByteDance), Silver Lake co-CEO Egon Durban, Oracle EVP Kenneth Glueck, MGX's David Scott, and new CEO Adam Presser. Former TikTok executive Kim Farrell serves as chief security officer. Shortly after, TikTok updated U.S. terms of service, restricting users under 13.
President Trump celebrated on Truth Social: 'I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors...' He thanked Chinese President Xi Jinping for approval. Vice President JD Vance confirmed control over content recommendations.
Chinese officials urged a balanced resolution. A Ministry of Commerce spokesperson in late December expressed hope for a lawful agreement compliant with Chinese laws and a fair U.S. business environment for Chinese firms.
Experts offered mixed views. Pan Helin, an Expert Committee member under China's Ministry of Industry and Information Technology, called it a viable compliance path stabilizing TikTok's model and building U.S. trust, though potentially slowing innovation. A BBC report noted the deal's logic given TikTok's 200 million U.S. users. U.S. critics remain wary: Sen. Edward Markey (D-Mass.) criticized transparency lacks; Rep. John Moolenaar (R-Mich.) questioned Chinese Communist Party influence on algorithms and data security; Hudson Institute's Michael Sobolik warned of persistent risks; Georgetown's Anupam Chander feared domestic propaganda shifts.
The deal averts an immediate ban, enabling operations in the key U.S. market amid geopolitical tensions, though it may face congressional scrutiny and legal challenges.
