TikTok Deal Creates US-Led Venture to Protect Data

TikTok’s long-running fight to stay online in the United States may have reached its biggest turning point yet.
ByteDance says it has finalized a new majority American-owned venture designed to secure U.S. user data, an effort aimed at preventing a nationwide ban.

A battle that began under Trump in 2020

TikTok’s position in the U.S. has been under scrutiny for years, driven by concerns that Chinese ownership could expose American user data to foreign government access.

Those fears exploded into a political and legal battle in August 2020, when then-President Donald Trump attempted to ban TikTok on national security grounds, an effort that ultimately failed.

Since then, the app has remained hugely popular in the U.S., with TikTok saying it is used by more than 200 million Americans.

But the pressure never fully eased, and the push for a restructuring of TikTok’s U.S. operations continued through new legislative efforts.

The main development: ByteDance finalizes a US-majority joint venture

On Thursday, TikTok’s Chinese parent company ByteDance announced it has finalized an agreement to create a new joint venture called TikTok USDS Joint Venture LLC.

According to ByteDance, the purpose of the venture is to protect U.S. user data, as well as the app’s systems and algorithms, through upgraded privacy and cybersecurity safeguards.

The ownership structure is designed to ensure American and global investors hold the controlling stake.

Under the agreement:

• American and global investors will hold 80.1% of the venture
  

• ByteDance will retain 19.9% ownership
  

That split is central to TikTok’s attempt to satisfy U.S. demands that the app reduce Chinese control over sensitive infrastructure.

Who’s involved: Oracle, Silver Lake, and MGX take key stakes

The joint venture will have three managing investors, each holding 15%:

• Oracle, a major cloud computing company
  

• Silver Lake, a private equity firm
  

• MGX, an Abu Dhabi-based investment firm
  

ByteDance’s announcement also listed other investors participating in the venture, including:

• Dell Family Office, linked to Dell Technologies founder Michael Dell
  

• Vastmere Strategic Investments
  

• Alpha Wave Partners
  

• Revolution
  

• Merritt Way
  

• Via Nova
  

• Virgo LI
  

• NJJ Capital
  

The breadth of the investor group signals that TikTok’s U.S. future is no longer just a political question, it’s also a major financial and strategic business deal.

White House confirmation: Both governments signed off

A White House official told Reuters that both the U.S. and Chinese governments had signed off on the agreement.

The Chinese Embassy in Washington did not immediately comment, according to the report.

This approval matters because any TikTok restructuring tied to data, algorithms, and ownership would likely face scrutiny on both sides, Washington for security reasons, and Beijing for technology and corporate control concerns.

According to a Reuters report, the deal aligns closely with the framework that had been discussed publicly in recent months.

How the venture will handle data and the recommendation algorithm

One of the most sensitive parts of TikTok’s operations is its recommendation algorithm, the engine that decides what videos users see and why they keep watching.

ByteDance said the new venture will:

• Secure U.S. user data
  

• Secure TikTok apps and algorithms
  

• Use enhanced data privacy and cybersecurity measures
  

TikTok also stated that the venture will retrain, test, and update its content recommendation algorithm using U.S. user data, and that the algorithm will be secured inside Oracle’s U.S.-based cloud infrastructure.

This is a key detail because U.S. policymakers have repeatedly raised concerns that TikTok’s underlying systems could be influenced or accessed in ways that are difficult to verify.

Leadership appointments: New CEO and chief security officer named

The venture is also taking shape with executive appointments meant to reinforce security credibility.

TikTok said:

• Adam Presser has been appointed CEO
  

• Will Farrell has been named chief security officer
  

In addition, TikTok CEO Shou Chew will serve on the venture’s board. TikTok said Chew will continue leading the company’s global business strategy.

What Trump said before: Delay, divestiture, and a shifting tone

The agreement reflects the same broad structure described in September, when Trump delayed enforcement of a law that would ban TikTok unless ByteDance sold the app. That enforcement deadline was pushed to January 23.

Trump has also publicly argued that the deal met divestiture requirements under a 2024 law, according to Reuters.

What makes the politics around TikTok even more unusual is Trump’s own relationship with the platform. He has more than 16 million followers on his personal TikTok account and has credited the app with helping his reelection effort.

Reuters also reported that Trump received a TikTok document on December 22 highlighting his popularity on the platform, citing a photo published by The New York Times.

Meanwhile, the White House launched an official TikTok account in August—showing how the platform has become difficult to separate from modern political communication, even as it remains controversial.

Expert insight and public reaction: Security vs. influence debate continues

While ByteDance is presenting the venture as a security-first solution, the broader debate is unlikely to disappear overnight.

The core U.S. concern has never been only about where TikTok stores data—it has also been about who can ultimately influence decisions around content, ranking systems, and platform governance.

A White House official’s confirmation to Reuters that both governments signed off is likely to be seen by supporters as proof the agreement is legitimate and enforceable.

At the same time, critics may argue that ownership structures alone do not fully answer questions about operational control and oversight—especially when ByteDance remains a minority owner.

This development has been widely framed as one of the most significant steps yet in TikTok’s effort to address U.S. national security pressure, according to Reuters.

What Reuters reported earlier: Split operations and backend control

In September, Reuters reported, citing sources that ByteDance would maintain ownership of TikTok’s U.S. business operations, while ceding control of data, content, and the algorithm to the new venture.

Those sources said the joint venture would operate as the backend engine for the U.S. company, managing U.S. user data and the algorithm.

They also described a separate ByteDance-owned division that would control revenue-generating operations such as:

• Advertising
  

• E-commerce
  

The joint venture would receive a portion of revenue in exchange for technology and data services, the sources said.

This structure suggests TikTok is trying to create a firewall: separating sensitive infrastructure from business growth operations, while still allowing ByteDance to benefit financially.

Impact analysis: What changes for users, advertisers, and the industry

If the venture operates as described, the most immediate impact for everyday TikTok users may be subtle. Most people will still open the same app, scroll the same feed, and watch the same creators.

But behind the scenes, this could reshape how TikTok functions in the U.S. in several important ways:

1) A potential path away from a nationwide ban

The biggest outcome is that TikTok may avoid the disruption of being removed from U.S. app stores or losing legal permission to operate.

2) A new model for “localized tech governance”

This venture could become a template for how foreign-owned platforms survive in politically sensitive markets, by building country-specific control structures.

3) Higher trust for enterprise advertisers

Brands spending heavily on TikTok ads often want stability, predictability, and low regulatory risk. A U.S.-led data structure may reduce uncertainty.

4) Increased scrutiny on algorithms across the sector

TikTok’s algorithm has long been a focus of lawmakers. If the venture secures and retrains the algorithm on U.S. data, other platforms may face renewed calls for transparency too.

A major milestone, but not the end of the story

ByteDance’s finalized agreement to launch a majority American-owned TikTok venture marks one of the most significant moments in the platform’s U.S. survival strategy.

With Oracle, Silver Lake, and MGX in managing roles, and with U.S. and Chinese sign-off confirmed to Reuters, the deal appears designed to answer the toughest questions regulators have raised since 2020.

Whether this structure permanently settles the national security debate, or simply reshapes it into a new phase, will depend on how the venture operates in practice, and how closely it is monitored in the months ahead.

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