TikTok shifted its US operations into a new majority-American-owned JV to address national security concerns and avoid a potential ban.
The new entity will oversee US user data, content moderation and recommendation systems.
The restructuring fulfils US legal requirements on divestment and allows TikTok to continue operating for nearly 200 million American users.
TikTok Finally Separates US Operations, Is ByteDance Losing Control?
The newly created entity, named TikTok USDS Joint Venture LLC, will be led by a consortium consisting of Oracle, Silver Lake and Abu Dhabi-based MGX. The consortium will collectively hold a 45% stake in the new company, with each investor owning 15% stake
TikTok Secures US Future, Shifts Operations to New American-Led Entity AI-generated image
Summary
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ByteDance, the parent company of short video making app TikTok, has finalised binding agreements to shift key parts of its US operations into a new joint venture (JV) that will be majority owned and controlled by American investors. The move is aimed at preventing a possible ban of the app in US, Bloomberg reported.
The newly created entity, named TikTok USDS Joint Venture LLC, will be led by a consortium consisting of Oracle, Silver Lake and Abu Dhabi-based MGX. The consortium will collectively hold a 45% stake in the new company, with each investor owning 15% stake.
Overall, the US-based joint venture will be 50% owned by this investor group, 30.1% by existing ByteDance investor affiliates, and 19.9% by ByteDance itself.
The deal is part of a broader effort to address long-standing US national security concerns related to data privacy and foreign influence. This agreement follows years of political pressure on TikTok over its Chinese ownership.
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Control of the company will rest with a seven-member board that will have a majority of American directors. Former TikTok executive Adam Presser has been appointed CEO of the US entity. TikTok’s global CEO, Shou Chew, will join the board of TikTok US while continuing to run the app’s worldwide operations.
As part of the restructuring, ByteDance will lease a version of its content-recommendation algorithm to the US venture. This algorithm will be retrained using only US user data, giving the new entity authority over content moderation and recommendations within the country.
US user data will now be stored in a secure cloud system managed by Oracle, which will also be responsible for auditing and ensuring TikTok complies with agreed American “national security terms,” according to the report.
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The deal fulfils the requirements of a 2024 US law mandating divestment to non-Chinese owners and aligns with an executive order approved in late 2025. It is designed to allow TikTok to continue operating for its nearly 200 million users in the US.
Concerns over TikTok’s data practices date back several years. During his first term, US President Donald Trump attempted to ban the app in 2020, citing fears that the Chinese government could access American user data or influence content. TikTok has repeatedly denied those allegations, stating that such misuse has never occurred.