WASHINGTON / SAN FRANCISCO — After a years‑long political, legal and regulatory battle, TikTok has finalized a landmark agreement to separate its U.S. operations from its global business, creating a new entity that will keep the wildly popular short‑video platform operating in the United States under majority American control. The deal — announced and completed on January 22, 2026 — ends prolonged uncertainty over the app’s future amid national security concerns and an earlier law requiring divestment or a ban.
A New Chapter for TikTok in the United States
The social media giant’s Chinese parent, ByteDance, struck an agreement with U.S. and global investors to form a new company called TikTok USDS Joint Venture LLC, which will house key elements of TikTok’s U.S. operations. Under the deal:
- A consortium of investors including Oracle, Silver Lake and UAE‑based MGX will collectively own the majority of the venture.
- ByteDance will retain a minority stake — just under 20 percent — meeting the limits set by U.S. legislation.
- A seven‑member board dominated by American directors will govern the new entity.
The arrangement means TikTok will continue to operate in the United States indefinitely, avoiding the nationwide ban that loomed since Congress passed a divest‑or‑ban law in 2024. Those measures were upheld by the Supreme Court and tied to concerns about foreign influence and data privacy linked to Chinese ownership.
Why the Deal Was Necessary
TikTok, one of the most downloaded apps in the world with hundreds of millions of American users, has long been the subject of scrutiny by U.S. lawmakers and national security officials. Critics argued that, as a Chinese‑owned platform, sensitive user data could be accessed or exploited by the Chinese government — a scenario TikTok and ByteDance have repeatedly denied.
In response, U.S. legislation was enacted in 2024 that would force ByteDance to sell the app’s American operations to non‑Chinese investors or see the app banned from U.S. app stores. The law reflected bipartisan concerns about data governance and foreign influence in digital networks.
The deal reached this week represents a rare compromise in the contentious U.S.–China technology rivalry, allowing TikTok to stay active in the American market while placing operational control and data safeguards under U.S.‑aligned leadership.
What the Split Means for Users and Data
One of the central features of the new structure is how U.S. user data and algorithm management will be handled:
- Oracle will host U.S. user data in secure domestic cloud infrastructure and act as a “trusted security partner.”
- The platform’s recommendation algorithm — widely credited with driving TikTok’s engagement — will be retrained and secured using only U.S. data, overseen by the new joint venture.
- Content moderation, user data protection and cybersecurity functions will fall under the new American entity’s authority.
These provisions are designed to satisfy national security requirements while allowing the platform to maintain its distinctive functionality for U.S. users.
Leadership and Governance
Leadership appointments reflect the deal’s hybrid structure:
- Adam Presser, a former TikTok operations and trust and safety head, will serve as CEO of the U.S. entity.
- Will Farrell, who oversaw privacy and security projects, is named Chief Security Officer.
- Shou Zi Chew, TikTok’s global chief executive, joins the board of the new venture, linking U.S. and global strategic oversight.
The majority‑American board includes representatives from Oracle, Silver Lake and other investor groups, aligning governance with U.S. regulatory expectations.
Political Ramifications and Reactions
The deal has immediate political and diplomatic implications:
- Former President Donald Trump, who had previously threatened to ban TikTok outright in the U.S., publicly welcomed the final agreement, calling it a key achievement that preserves the app for American audiences.
- U.S. national security advocates view the establishment of an American‑led entity as a major step in reconciling data privacy concerns with global digital connectivity.
- ByteDance and TikTok have lauded the deal as a solution that allows continued creative expression, community connection and economic activity for millions of users, creators and advertisers.
China’s government has also signed off on the agreement, reflecting a rare consensus between Beijing and Washington on how to restructure a major global tech business amid geopolitical tension.
Broader Implications for Tech and Geopolitics
Experts say the TikTok deal may set a precedent for how global technology platforms navigate fragmented regulatory landscapes shaped by national security priorities. As data protection and foreign influence concerns shape tech policy worldwide, the agreement showcases how corporate structures can be adapted to meet competing legal and political demands.
For advertisers and investors, the resolution removes a major overhang of uncertainty that had weighed on TikTok’s U.S. business for several years, potentially stabilising ad markets and encouraging longer‑term growth strategies.
Looking Ahead
With the spinoff complete, TikTok will now focus on serving its U.S. user base under its new ownership model, while continuing to integrate with the broader global platform where possible. The coming months will test how effectively the new governance structure balances security, innovation and user experience — and whether it can serve as a model for future tech diplomacy in an era of digital sovereignty concerns.
