ByteDance, the Chinese parent company of TikTok, announced on Thursday that it has finalised an agreement to create a new joint venture that will be majority owned by American investors, a move aimed at safeguarding US user data and preventing a possible ban on the popular short-video platform in the United States. TikTok has more than 200 million users in the country, and the deal marks a significant turning point after years of political and regulatory uncertainty.
The agreement represents a major breakthrough for TikTok following a prolonged standoff that began in August 2020, when then-President Donald Trump attempted to ban the app over national security concerns, an effort that ultimately failed. Since then, TikTok and its parent company have been engaged in negotiations and legal battles to ensure the app’s continued operation in the US market.
Under the deal, a new entity named TikTok USDS Joint Venture LLC has been established. ByteDance said this venture will be responsible for protecting US user data, applications and recommendation algorithms through enhanced data privacy safeguards and advanced cybersecurity systems designed specifically for the American market.
The ownership structure of the joint venture gives American and other global investors a controlling stake of 80.1 per cent, while ByteDance will retain a minority holding of 19.9 per cent. This structure is intended to address long-standing US government concerns about Chinese ownership and potential access to sensitive user data.
Three managing investors will play a central role in the venture. Cloud computing firm Oracle, private equity group Silver Lake and Abu Dhabi-based investment company MGX will each hold a 15 per cent stake. A White House official confirmed to Reuters that both the US and Chinese governments have approved the arrangement, clearing a key hurdle for the deal. The Chinese Embassy in Washington did not immediately respond to requests for comment.
The terms of the agreement closely mirror those outlined in September, when Trump postponed enforcement of a law that would have banned TikTok unless ByteDance divested its US operations. That law, passed in 2024, set a deadline for compliance, which was later extended to January 23 to allow time for negotiations. Trump said last year that the proposed structure satisfied the divestment requirements laid out in the legislation.
According to the White House, the new joint venture will operate TikTok’s US-facing app. However, some aspects of the arrangement remain undisclosed, including the precise commercial and operational relationships between ByteDance and the new venture.
Trump, who has more than 16 million followers on TikTok, has publicly credited the platform with helping him secure reelection. Reports have said TikTok shared internal documents with him in December highlighting his popularity on the app. The White House itself launched an official TikTok account in August, signalling a shift in the administration’s stance toward the platform.
TikTok said the investor group also includes Dell Family Office, the investment arm linked to Dell Technologies founder Michael Dell, along with firms such as Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Leadership appointments for the new venture have also been finalised. Former TikTok USDS executives Adam Presser and Will Farrell have been named chief executive officer and chief security officer, respectively. TikTok’s global CEO, Shou Chew, will sit on the board of the joint venture while continuing to oversee the company’s worldwide operations and strategy.
As part of the new structure, the joint venture will be responsible for retraining, testing and updating TikTok’s content recommendation algorithm using US user data. The algorithm and related data will be hosted securely on Oracle’s cloud infrastructure located in the United States, a key element meant to reassure regulators about data sovereignty.
Earlier reports by Reuters had indicated that ByteDance would retain ownership of TikTok’s US business operations but hand over control of data management, content moderation and algorithmic systems to the joint venture. Sources also said the venture would handle backend operations related to US user data and technology, while a separate ByteDance-owned unit would continue to manage revenue-generating activities such as advertising and e-commerce.
Under the final arrangement, the new venture will earn a share of TikTok’s revenue in exchange for providing technology and data services, according to people familiar with the deal. The structure is designed to balance regulatory demands with ByteDance’s desire to maintain a presence in one of TikTok’s most important markets.
