TikTok signs a deal to sell its U.S. business

Deal structure and key participants

TikTok has reportedly signed an agreement to sell its U.S. operations to a joint venture controlled by American investors. According to internal documents, the transaction is expected to close on January 22. The new entity will operate under the name TikTok USDS Joint Venture LLC.

Under the proposed structure, 45% of the joint venture will belong to U.S. investors, including Oracle, Silver Lake, and the MGX investment fund. Nearly one third of the shares will be allocated to entities affiliated with existing ByteDance investors, while approximately 20% will remain with ByteDance itself. This structure is designed to formally reduce Chinese control while preserving operational continuity.

Responsibilities and data security

In an internal memo, CEO Shou Chew stated that the joint venture would be fully responsible for protecting U.S. user data, ensuring algorithm security, moderating content, and maintaining software infrastructure. A key element of the plan is the retraining of TikTok’s recommendation algorithm exclusively on U.S. user data to prevent external influence. Oracle is expected to act as a trusted cybersecurity partner and conduct audits to ensure compliance with U.S. national security requirements.

Why TikTok faced a ban in the United States

The push toward divestment stems from a law signed on April 24, 2024, requiring ByteDance to sell TikTok’s U.S. business within nine months or face a nationwide ban. The U.S. Department of Justice described the platform as a national security threat “of enormous depth and scale,” citing concerns over potential propaganda and data access by the Chinese government.

From a statistical standpoint, TikTok’s influence in the U.S. is significant. The platform has over 170 million American users, representing more than 50% of the country’s population. Studies show that the average U.S. user spends around 95 minutes per day on TikTok, making it one of the most engaging social platforms in the market. Among teenagers, TikTok usage exceeds 60%, intensifying concerns about behavioral influence and data exposure.

Legal battle and political pressure

Another major concern raised by U.S. authorities involves Chinese legislation that obliges domestic companies to cooperate with state intelligence agencies. ByteDance has consistently denied that U.S. user data could be accessed by Beijing, stating that all American data is stored on Oracle-managed servers.

The divestment deadline expired on January 19, 2025. ByteDance argued that the law violated First Amendment protections of free speech and petitioned the U.S. Supreme Court to suspend it. However, on January 17, the Court upheld the law, significantly increasing pressure on the company.

Temporary shutdown and recovery

On January 18, less than two hours before the ban took effect, TikTok ceased operations in the U.S. and disappeared from both Apple’s App Store and Google Play. Yet political dynamics quickly shifted. Donald Trump announced that after his inauguration he would order a delay in enforcement. Roughly 12 hours after the ban, and shortly after Trump’s statement, TikTok began restoring service across the United States.

Strategic implications

For TikTok, the deal represents a compromise between regulatory survival and global expansion. For the U.S. market, it highlights how digital platforms with massive user bases can become matters of national policy. With global TikTok users exceeding 1.6 billion, the outcome of the U.S. case may set a precedent for how governments worldwide regulate foreign-owned tech giants.