TikTok has finalized a deal that allows the short-video app to continue operating in the U.S. The agreement restructures TikTok’s U.S. business into a new joint venture that will be majority owned by American and global investors, reducing ByteDance’s ownership stake to below 20%.

“Today, TikTok USDS Joint Venture LLC has been established in compliance with the Executive Order signed by President Trump on September 25, 2025,” the company said in a press release on Thursday.

The move follows a U.S. law signed by former President Joe Biden in 2024 that required ByteDance to divest TikTok’s U.S. operations or face a nationwide ban over national security concerns. This law was upheld by the Appeal and Supreme Courts. The company claims the deal meets those requirements and is expected to close this week.

This new agreement appears to satisfy that requirement by shifting control of TikTok’s U.S. business away from ByteDance and into a newly structured entity.

How the new ownership structure works

Under the finalized deal, ByteDance will retain just under a 20% stake in the U.S. business. The remaining 80.1% will be held by American and global investors, according to TikTok.

Oracle, Silver Lake, and MGX, a UAE state-owned investment firm focused on artificial intelligence, will each take 15% stakes. Other investors include Susquehanna, Dragoneer, DFO, the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital.

The new entity will be known as TikTok USDS Joint Venture LLC. The company claims it will be governed by a seven-member board with a majority of American directors.

What happens to TikTok’s data and algorithm

As part of the deal, the joint venture will secure U.S. user data, apps, and algorithms through data privacy and cybersecurity measures. According to TikTok, the new U.S. joint venture "will operate under defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users."

U.S. user data will be stored locally in systems run by Oracle, with the algorithm hosted in Oracle’s U.S. cloud. The company also claims the content recommendation algorithm will be retrained and updated using U.S. user data. This means the version of the algorithm serving American users will operate within U.S. infrastructure rather than relying on systems controlled from China.

Political pressure that shaped the deal

This deal follows years of political scrutiny that intensified under both Democratic and Republican administrations. In September, The Keyword reported that the U.S. and China had reached a framework agreement that would give American investors majority control of a new company valued at up to $50 billion. This was followed by Trump's approval in the same month.

TikTok CEO Shou Chew confirmed in December that ByteDance had signed a binding agreement with investors, though he noted at the time that regulatory approval was still pending and that more work remained.

The deal’s closing this week suggests those regulatory hurdles have been cleared or at least addressed enough to meet a January 22 deadline set by the Trump administration. That deadline followed an executive order granting a 120-day stay on enforcing a federal ban.

President Donald Trump praised the deal in a social media post, saying TikTok “will now be owned by a group of great American patriots and investors, the biggest in the world."

At the same time, questions remain around the final valuation of TikTok’s U.S. business. U.S. Vice President JD Vance said in September that the unit could be valued at around $14 billion, though ByteDance has not confirmed any figures.

Why this matters for advertisers

The threat of a forced shutdown or sudden ban has made some marketers cautious about long-term spending on TikTok, especially for campaigns built around creator partnerships and ongoing audience engagement.

Last year, analysts predicted that the TikTok ban could push marketers toward alternative platforms like Meta, Snapchat, and YouTube. The finalized deal will now provide advertisers with clarity on TikTok’s U.S. operations.

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