After years of regulation and political maneuvering, the short video platform TikTok has finally reached a crucial agreement with the United States regarding the future of its American business operations. TikTok’s Chinese parent company ByteDance officially completed the transaction on Thursday, January 22, to establish a new joint venture company with majority U.S. ownership, in order to avoid a potential blanket ban on the application in the United States.
The news was first disclosed by Semafor and later confirmed by major media outlets such as Reuters and the Associated Press. Reports cited White House officials and multiple sources familiar with the matter confirming that both the U.S. and China have “signed off” on the deal, removing the last political obstacles.
According to the press release issued by TikTok, the company has reached agreements with the U.S. government and investors to establish a new joint venture entity named “TikTok USDS Joint Venture LLC” with majority U.S. ownership, in compliance with U.S. regulatory requirements.
In this newly formed joint venture, U.S. and other non-Chinese investors collectively hold an 80.1% stake, while ByteDance retains a 19.9% ownership (remaining the largest single shareholder).
Major investors include U.S. cloud service giant Oracle, private equity firm Silver Lake, and investment institution MGX based in Abu Dhabi. Each of the three entities holds a 15% stake, with the remaining shares held by various American and European investment firms.
TikTok stated that the joint venture entity will be responsible for the actual operations in the United States, handling the security and functioning of U.S. user data, applications, and content recommendation algorithms.
All U.S. user data will be stored in Oracle’s cloud systems located within the United States, following standards set by the National Institute of Standards and Technology (NIST) and international information security standard ISO 27001, with a data security and privacy protection mechanism established through third-party audits and certifications.
Regarding the highly scrutinized algorithm aspect, TikTok mentioned that the U.S. version of the content recommendation system will be retrained, tested, and updated with U.S. user data separate from the global TikTok algorithm, with daily management and security maintenance no longer directly involving the Chinese engineering team.
This arrangement directly addresses longstanding concerns of U.S. lawmakers, who previously raised fears that ByteDance might be compelled under Chinese law to provide U.S. user data to authorities in Beijing.
TikTok emphasized that the security and governance mechanisms established by the joint venture company will also cover other ByteDance-operated applications in the U.S., such as CapCut and Lemon…