TikTok has officially secured its operational future across the United States following ByteDance’s completion of a landmark agreement creating a predominantly American-owned joint venture. This strategic move directly addresses extensive national security concerns that have plagued the platform for several years and ensures compliance with American statutory requirements regarding foreign ownership of sensitive technology assets.
On Thursday, ByteDance announced the consummation of an agreement to establish TikTok USDS Joint Venture LLC. This new corporate entity is tasked with governance over TikTok’s U.S. user data management, as well as stewardship of the app’s core recommendation algorithm. By shifting control to a domestic-focused consortium, TikTok effectively sidesteps a full national ban on its short-form video platform, a service that currently engages more than 200 million American users.
Scrutiny of TikTok’s ownership and data handling intensified notably in 2020 when then-President Donald Trump initiated efforts to prohibit the application in the U.S., citing concerns that its Chinese proprietorship could pose significant national security risks. These concerns culminated in a 2024 legislative mandate requiring ByteDance to divest TikTok’s U.S. assets or face prohibition—a directive subsequently upheld by the Supreme Court.
Under the terms of the finalized deal, a coalition of American and global investors assumes ownership of 80.1% of the venture, with ByteDance retaining a minority stake of 19.9%. Notably, Oracle Corporation (NYSE: ORCL), private equity firm Silver Lake, and Abu Dhabi’s MGX each take an equal 15% portion of ownership and assume roles as managing investors. This structure reflects a calculated transfer of control aligned with U.S. regulatory expectations.
In terms of operational adjustments, TikTok has committed to housing all U.S. user data and its recommendation algorithm within Oracle’s U.S.-based data cloud infrastructure. This relocation comes with the implementation of stringent new privacy and cybersecurity protocols designed to protect user information and confirm algorithmic processing exclusively derives from American user data. The venture will engage in retraining and testing the algorithm to ensure compliance and reduce foreign influence risks.
Following the announcement, former President Trump expressed approval on his platform Truth Social, stating, "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 also acknowledged Chinese President Xi Jinping for granting authorization to proceed with the arrangement.
Reflecting market reactions, Oracle’s shares closed Thursday’s trading session up 2.47% at $178.18 and modestly advanced another 0.32% to $178.76 in after-hours transactions, as reported by Benzinga Pro. Despite this uptick, Oracle’s stock maintains a low Momentum score in Benzinga’s proprietary Edge Stock Rankings, exhibiting negative price trends across short-, medium-, and long-term horizons.
The establishment of TikTok USDS Joint Venture LLC represents a critical juncture for TikTok’s presence in the United States, balancing regulatory compliance with ongoing operational continuity. By installing U.S.-based investors at the helm, securing data within Oracle’s domestic cloud infrastructure, and implementing dedicated controls over the AI-driven recommendation engine, TikTok aims to assuage national security concerns while preserving user engagement.
This development also underscores the complex dynamics faced by global technology companies operating in a geopolitical environment where data privacy, ownership, and digital sovereignty carry heightened scrutiny. The sustained American majority ownership and enhanced safeguards provide a blueprint for mitigating regulatory pressures on tech platforms operating amid geopolitical tensions.
Looking forward, the venture’s long-term success will depend on its ability to maintain strict operational separation from Chinese influence, assure U.S. regulators of the integrity of its systems, and navigate the evolving landscape of content moderation and user privacy. The involvement of major institutional investors introduces both capital and governance oversight intended to bolster TikTok’s compliance posture.