TikTok has closed a deal that guarantees the app will continue operating in the United States. The company announced the agreement on Thursday, ending years of legal and political uncertainty.
The agreement resolves a long-standing dispute between Washington and Beijing. The conflict began during Donald Trump’s first presidency, when he attempted to ban TikTok over national security concerns.
US law threatened to block the app in January 2025 unless ByteDance sold its American operations. Trump delayed enforcement several times after returning to office.
The central issue involved TikTok’s recommendation algorithm. Under the deal, American owners now license the system, which will train exclusively on US user data.
Analysts expect noticeable changes to the platform, though the full effect on roughly 200 million American users remains unclear.
Political pressure forces US separation
US officials pressured TikTok for years to split from ByteDance. Lawmakers warned that Chinese ownership could put American user data at risk.
They argued Beijing could compel the company to hand over US user information. TikTok and ByteDance consistently denied the claims.
Trump first proposed banning TikTok in 2020. Momentum for the idea grew under President Joe Biden. In 2024, Biden signed legislation requiring ByteDance to sell TikTok or face a nationwide ban.
ByteDance challenged the law in court. In January last year, TikTok temporarily went offline in the US for 12 to 14 hours.
Service resumed after Trump, then president-elect, promised to reverse the ban. Later, he said he had reached an understanding with China to keep TikTok active.
In December, TikTok signed binding agreements with American and international investors. CEO Shou Zi Chew confirmed the deal in an internal memo.
Structure of the US venture
The agreement creates TikTok USDS Joint Venture LLC. The company will secure apps, algorithms, and user data under strict cybersecurity standards.
The joint venture will operate independently, overseen by a seven-member board with an American majority. Adam Presser, formerly of WarnerMedia, now serves as chief executive.
Three managing investors each hold 15% of the US business. Oracle will secure American user data and supervise retraining of the recommendation algorithm.
Oracle is chaired by Larry Ellison, a major Republican donor and Trump ally. Silver Lake, a US technology investment firm managing roughly $116bn in assets, also participates. MGX, an Emirati investor focused on AI and technology, completes the group.
Ownership and leadership
ByteDance retains a 19.9% stake in the venture. Investors hold the remaining 35.1%, including Michael Dell’s family office and Vastmere Strategic Investments, an affiliate of Susquehanna International Group.
Jeff Yass, co-founder of Susquehanna and a Trump ally, held roughly 7% of ByteDance last year. Susquehanna managing director Mark Dooley will join the board.
Shou Zi Chew and executives from Oracle, Silver Lake, and MGX will also serve on the board.
Algorithm remains central
TikTok’s algorithm remains the core of the US deal. Experts describe it as the platform’s most valuable asset.
A former social media executive said competitors could not replicate its success. Instagram Reels and YouTube Shorts never matched its performance. Early innovators, he added, usually understand their technology best.
ByteDance initially refused to release the algorithm. Chinese authorities supported that stance. In September, China’s cybersecurity regulator indicated it could allow ByteDance to license the system to American owners.
Under the agreement, the algorithm will train only on US user data, which must comply with American regulations. TikTok said Oracle will secure the system in its US cloud infrastructure.
Experts warn US users may notice a lighter, possibly slower app. Recommendations could also become less precise than the global version.
