TikTok has finalised a landmark deal that allows the short-video platform to continue operating in the United States. The company confirmed the agreement on Thursday, ending years of political uncertainty and legal battles.
The move resolves a long-running dispute between Washington and Beijing. The conflict began during Donald Trump’s first presidency when he attempted to ban the app over national security concerns.
US law threatened to block TikTok in January 2025 unless ByteDance sold its American business. Trump delayed enforcement several times after returning to office.
The core issue revolved around TikTok’s recommendation algorithm. Under the new structure, American owners now license the system, which will train only on US user data.
Analysts expect changes to the platform, though the precise impact on roughly 200 million American users remains unclear.
Political pressure forces a US-only operation
US officials have pressured TikTok for years to separate from ByteDance. Lawmakers cited concerns that Chinese ownership could endanger user data.
They warned that Beijing could compel the company to hand over information on US users. TikTok and ByteDance consistently denied the claims.
Trump first proposed banning TikTok in 2020. Momentum for the plan increased during Joe Biden’s presidency. In 2024, Biden signed legislation requiring a sale or triggering a nationwide ban.
ByteDance challenged the law in court. In January last year, TikTok temporarily went offline in the United States for 12 to 14 hours.
Service returned after Trump, then president-elect, promised to reverse the ban. Later, Trump said he reached an understanding with China to keep the app running.
In December, TikTok signed binding agreements with American and global investors. CEO Shou Zi Chew confirmed the deal in a company memo.
How the new US structure works
The agreement creates TikTok USDS Joint Venture LLC. The company will protect apps, algorithms, and user data through strict cybersecurity standards.
The joint venture will operate independently, governed by a seven-member board with a majority of American directors. 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 oversee 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 in AI and technology, completes the group.
ByteDance retains a minority stake
ByteDance keeps a 19.9% share in the venture. Investors own 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 sit on the board.
The algorithm remains central
TikTok’s algorithm lies at the heart of the US deal. Observers call it the platform’s defining 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 noted, 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 might allow ByteDance to license the system to American owners.
Under the agreement, the algorithm will rely solely on US user data, which will comply with American regulations. TikTok said Oracle will secure the system in its US cloud infrastructure.
Experts say US users may notice a lighter, possibly slower app. Content recommendations may also become less precise than the global version.
