San Diego, CA, January 23, 2026
In a major move, TikTok has agreed to change its U.S. operations’ ownership to a joint venture managed by American investors, preventing a potential ban in the U.S. This entity, TikTok USDS Joint Venture LLC, includes Oracle and Silver Lake among its major shareholders. ByteDance retains a minority stake. The divestiture responds to national security concerns and is valued at approximately $14 billion, allowing TikTok to uphold its U.S. presence while addressing key operational responsibilities.
San Diego, CA
TikTok Divests U.S. Operations to American-Controlled Venture
San Diego, CA — In a significant development, TikTok has finalized a deal to divest its U.S. operations to a joint venture primarily controlled by American investors, effectively averting a potential ban in the United States. The agreement, announced on January 22, 2026, involves the establishment of TikTok USDS Joint Venture LLC, a new entity that will oversee TikTok’s U.S. business.
Details of the Joint Venture
The joint venture is majority-owned by U.S. investors, including tech company Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX, each holding a 15% stake. ByteDance, TikTok’s Chinese parent company, retains a 19.9% ownership in the new entity. The joint venture is responsible for U.S. data protection, algorithm security, content moderation, and software assurance. Leadership appointments include Adam Presser as CEO and Will Farrell as Chief Security Officer, both previously involved in TikTok’s U.S. data security efforts. The deal values TikTok U.S. at approximately $14 billion, a figure that appears low relative to its estimated $14 billion annual advertising revenue.
Background and Legislative Context
This divestiture follows the enactment of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA) in April 2024, which mandated that TikTok’s Chinese parent company, ByteDance, sever ties with the social media platform’s American operations or face a ban in the U.S. The law was introduced amid concerns that ByteDance might share user data with the Chinese government and that Chinese authorities could manipulate TikTok’s algorithms to influence content. Despite these concerns, ByteDance has consistently denied any misuse of user data or foreign government influence over the platform.
Implications for TikTok’s U.S. Operations
The formation of TikTok USDS Joint Venture LLC ensures that TikTok can continue operating in the United States under the new ownership structure. The joint venture will handle key responsibilities concerning U.S. data protection, algorithm security, and content moderation. The app will continue functioning under the same interface, now operating with U.S. user data stored locally under Oracle management.
Political Reactions
Former President Donald Trump, who facilitated the agreement after initially pausing a planned ban on his first day in office, publicly praised the deal. He thanked Chinese leader Xi Jinping for working with the U.S. and approving the deal, expressing hope that he would be remembered by those who use and love TikTok.
Conclusion
The successful divestiture of TikTok’s U.S. operations marks a pivotal moment in the ongoing U.S.-China negotiations over the platform’s future. The establishment of TikTok USDS Joint Venture LLC addresses national security concerns while allowing TikTok to maintain its presence in the U.S. market, ensuring continued service for its American user base.
Frequently Asked Questions (FAQ)
What is TikTok USDS Joint Venture LLC?
TikTok USDS Joint Venture LLC is a new entity formed to oversee TikTok’s U.S. operations. It is majority-owned by U.S. investors, including Oracle, Silver Lake, and MGX, with ByteDance retaining a 19.9% stake. The joint venture is responsible for U.S. data protection, algorithm security, content moderation, and software assurance. Leadership includes Adam Presser as CEO and Will Farrell as Chief Security Officer. The deal values TikTok U.S. at approximately $14 billion.
What is the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA)?
PAFACA is a U.S. federal law enacted in April 2024 that required ByteDance to sever ties with TikTok’s American operations or face a ban in the U.S. The law was introduced amid concerns that ByteDance might share user data with the Chinese government and that Chinese authorities could manipulate TikTok’s algorithms to influence content. Despite these concerns, ByteDance has consistently denied any misuse of user data or foreign government influence over the platform.
How does the new ownership structure affect TikTok’s operations in the U.S.?
The new ownership structure allows TikTok to continue operating in the U.S. under the management of the joint venture. The joint venture will handle key responsibilities concerning U.S. data protection, algorithm security, and content moderation. The app will continue functioning under the same interface, now operating with U.S. user data stored locally under Oracle management.
What was the political reaction to the TikTok divestiture deal?
Former President Donald Trump publicly praised the deal, thanking Chinese leader Xi Jinping for working with the U.S. and approving the deal. He expressed hope that he would be remembered by those who use and love TikTok.
Key Features of the TikTok U.S. Divestiture Deal
| Feature | Details |
|---|---|
| Joint Venture Name | TikTok USDS Joint Venture LLC |
| Majority Ownership | U.S. investors: Oracle, Silver Lake, and MGX (each holding 15%) |
| ByteDance’s Stake | 19.9% |
| Leadership | CEO: Adam Presser; Chief Security Officer: Will Farrell |
| Valuation | Approximately $14 billion |
| Responsibilities | U.S. data protection, algorithm security, content moderation, and software assurance |
| App Functionality | Continues under the same interface with U.S. user data stored locally under Oracle management |
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