TikTok Reaches Historic Deal to Separate US Operations via New Joint Venture
TikTok Closes Historic Deal to Separate US Business
In a landmark move, TikTok has officially reached a binding agreement to separate its US operations into a new entity titled TikTok USDS Joint Venture LLC. According to an internal memo from CEO Shou Zi Chew, the deal is set to officially close on January 22, 2026. This strategic restructuring aims to end a five-year geopolitical tug-of-war and ensure the app remains available to its 170 million US users.
The new structure effectively shifts majority control to Western and global investors. A consortium including Oracle, Silver Lake, and Abu Dhabi-based MGX will each hold a 15% stake, totaling 45%. Combined with shares held by existing ByteDance investors (30.1%), non-Chinese entities will control over 80% of the venture. ByteDance will see its direct ownership slashed to just 19.9%, meeting the divestiture requirements mandated by US law.
New Algorithm and Governance Standards
One of the most critical components of the deal is the Algorithm Retraining initiative. The joint venture will retrain TikTok’s recommendation engine—the “For You” feed—exclusively on US user data. This process is designed to ensure the algorithm is transparent, auditable, and completely free from external or foreign manipulation.
The governance of the new entity will be overseen by a seven-member board of directors, the majority of whom will be American citizens. This board will have final authority over content moderation policies and strategic decisions within the US, further distancing the platform from its Beijing-based parent company.
Oracle’s Role as the Trusted Security Partner
Oracle will serve as the “Trusted Technology Provider,” going beyond a simple investment role. They will be responsible for hosting all US user data on domestic cloud servers and conducting rigorous software audits. While the US joint venture operates as an independent entity, TikTok Global will continue to manage international product interoperability and global commercial activities, such as e-commerce and marketing outside the United States.
This deal, valued at approximately $14 billion, serves as a definitive resolution to a saga that began in 2020. After surviving multiple ban threats and legal challenges, the agreement establishes a new precedent for how multinational tech giants navigate the complex intersection of global business and national security.
After years of “will they or won’t they,” TikTok finally pulled the trigger on a deal that keeps the scrolls coming while satisfying the suits in D.C. It’s a massive win for creators who were sweating over a total blackout, though it’ll be interesting to see if a “retrained” US algorithm feels the same as the one we know today. Either way, TikTok just proved it’s too big to fail—it just needed a $14 billion American makeover to stay in the game.
