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| TikTok signs agreement to create new US joint venture. |
For months, the future of TikTok in the United States hung in the balance. Now, a last-minute deal has charted a new course. ByteDance, TikTok’s Beijing-based parent company, has reached an agreement to restructure its U.S. operations, effectively keeping the popular app alive and accessible for its 170 million American users.
The breakthrough, first reported by CNBC, involves placing TikTok’s U.S. business into a newly formed, independent entity. This move is designed to satisfy longstanding national security concerns by formally separating American user data and operations from ByteDance’s direct control.
A New Entity Takes Control
In an internal memo to employees, TikTok CEO Shou Zi Chew outlined the new structure. The company’s U.S. operations will now be housed in “TikTok USDS Joint Venture LLC.” A consortium of investors led by U.S. firms will hold majority control, with the agreement officially taking effect on January 22.
This date is strategically significant—it falls just one day before the expiration of an executive order that had paused the enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act. The deal essentially preempts a potential ban.
Who Owns the New TikTok U.S.?
According to Chew’s memo, the joint venture has signed agreements with three key managing investors:
- Oracle: The U.S. tech giant, already TikTok’s cloud partner.
- Silver Lake: A major American private equity firm.
- MGX: An Abu Dhabi-based investment company.
While often described as a “U.S.-led” group, the inclusion of MGX means the ownership is not exclusively American. However, this is broadly the same investor group that U.S. officials had previously signaled they would approve.
The reported ownership breakdown is as follows:
- Oracle, Silver Lake, and MGX will collectively hold about 45%.
- Affiliates of existing ByteDance investors will own roughly 30.1%.
- ByteDance itself will retain a 19.9% stake.
Governance will also shift. The new entity will operate under a board of seven directors, with a majority expected to be U.S. nationals.
The Algorithm Question: Retraining for Independence
One of the most critical and sensitive aspects of the negotiations has always been the TikTok algorithm. U.S. officials have repeatedly expressed concern that control over the powerful recommendation engine could allow for indirect influence over content.
Chew addressed this directly, stating that the new U.S. entity will “retrain” the algorithm using American user data. The goal, he said, is to ensure the “For You” feed is secure and not subject to outside manipulation. While this marks a significant concession, the practical details of this retraining process and its true independence from ByteDance’s global systems will be closely watched by regulators and users alike.
What This Means for Users and Creators
For the vast community of U.S. users and content creators, this deal means continuity. The intense uncertainty that loomed over the platform has been lifted, at least for the foreseeable future. The app will remain available for download, and users can expect business as usual.
The restructuring represents a monumental compromise. ByteDance avoids a forced sale or shutdown but cedes operational control of its most important market. The U.S. government achieves its stated goal of insulating American user data and platform governance from foreign adversary control, albeit through a complex corporate structure rather than a clean divestiture.
As the January 22 effective date approaches, all eyes will be on the transition to the new joint venture, setting the stage for TikTok’s next chapter in the United States.