ByteDance finalizes majority U.S.-owned TikTok joint venture to avert ban

ByteDance said it finalized an agreement on Jan. 22, 2026, to create a majority American-owned joint venture that will house TikTok’s U.S. user operations, a step meant to satisfy a 2024 U.S. national security law and avert an effective ban on the app used by more than 200 million Americans.

The new entity, TikTok USDS Joint Venture LLC, will assume responsibility for U.S. user data, apps and the content-recommendation algorithm, according to company filings and statements. The venture will retrain, test and update the algorithm using U.S. user data, and the algorithm code will be licensed from ByteDance and secured in Oracle’s U.S. cloud. The company described a set of defined safeguards intended to protect national security, including comprehensive data protections, algorithm security, content moderation and software assurances for U.S. users.

Company filings set the ownership split at 80.1 percent held by American and global investors and 19.9 percent retained by ByteDance. Three managing investors, Oracle, Silver Lake and MGX, an Abu Dhabi-based investment firm, are each named as holding 15 percent stakes and serving as managing investors, accounting for 45 percent of the venture. Other American and global investors and affiliates make up the remainder of the external stake. Some initial shorthand descriptions produced apparent percentage discrepancies; the filings and the joint-venture statement cite 80.1 percent external ownership and 19.9 percent ByteDance ownership as the authoritative numbers.

The joint venture is described as providing backend operations for U.S. users while certain revenue-generating business operations, including e-commerce and advertising, will remain in a separate ByteDance-owned division. TikTok CEO Shou Chew was named to the joint venture’s board, and company filings indicate governance will be conducted by a seven-member majority-American board of directors, with the three managing investors holding management roles under the transaction agreements. Internal memos from TikTok management used the joint-venture name and discussed closing arrangements.

The transaction is presented as the mechanism for complying with the statute Congress passed in 2024, which required divestiture of U.S. operations or a ban. The law was upheld by the U.S. Supreme Court in January. A White House official said both the U.S. and Chinese governments signed off on the deal. At the time of the filing, the Chinese Embassy in Washington had not immediately commented.

Beyond TikTok, company statements indicate the joint venture will extend to other ByteDance apps used by U.S. consumers, including CapCut and Lemon8. The structure leaves ByteDance with a minority stake and with the role of licensing critical algorithmic technology, raising questions about long-term operational independence and the sufficiency of technical safeguards.

Experts and policymakers will now weigh the adequacy of the protections defined in the transaction and the mechanisms of oversight. Regulators will need to ensure that data residency, algorithmic controls and software attestations are implemented and independently verifiable if the joint venture is to allay national security concerns. The deal marks a pivotal moment in the regulation of global social media platforms and sets a precedent for how commercial structures and technical controls can be combined to address geopolitical and security-related risks.