TikTok to move US operations to joint venture in bid to avoid government ban

In a bid to circumvent the looming threat of a U.S. ban, TikTok's Chinese parent company ByteDance, has announced a pivotal deal that will see the short-video platform move its operations in the U.S. to a joint venture. This agreement, signed on Thursday, marks a significant turning point in the long-running saga between TikTok and the U.S. government.

The deal brings together American and global investors, with Oracle, Silver Lake, and MGX securing key stakes in the new entity. TikTok USDS Joint Venture LLC will now oversee the app’s operations in the U.S., with ByteDance maintaining a 19.9% stake. The move follows years of pressure and accusations surrounding TikTok’s ties to China, which fueled national security concerns and calls for the company’s divestiture.

The joint venture, which is set to officially begin in January 2029, will provide TikTok with the autonomy to handle U.S. data protection, algorithm security, content moderation, and software assurance without direct oversight from ByteDance. This follows an executive order that allowed for the restructuring of the app's U.S. operations, responding to concerns over the influence of Chinese-owned companies on American digital infrastructure.

“TikTok’s new partnership will ensure over 170 million Americans continue exploring a world of endless possibilities, maintaining the platform as part of a vital global community,” said Shou Zi Chew, TikTok CEO, in an internal memo.

Key Terms of the Agreement

Under the new deal, Oracle will act as the "trusted security partner," responsible for ensuring compliance with U.S. data regulations, including storing U.S. user data in a secure cloud environment based in the U.S. This reassures authorities that sensitive information will be safeguarded within American borders.

Further bolstering its autonomy, the new venture will operate independently with a majority American board. A minority of board seats will be filled by ByteDance representatives. Oracle, Silver Lake, and MGX will collectively hold 45% of the new venture, while ByteDance retains 19.9%. The remaining 35.1% will be controlled by other existing and new investors.

What This Means for TikTok

The agreement represents an effort to address U.S. security concerns without forfeiting TikTok’s position in the global market. With its American operations now positioned as a more independent entity, the move seeks to ease fears of foreign control over one of the most popular apps among U.S. teenagers and young adults.

The deal is expected to be a significant step in easing the regulatory scrutiny TikTok has faced, but Democratic Senator Elizabeth Warren and others have raised concerns about the involvement of “billionaire investors,” demanding further transparency on the extent of their control.

With the joint venture agreement in place, TikTok’s U.S. operations appear set for a more structured and secure future, helping the app avoid the fate of being banned while maintaining its global presence.

(With inputs from Reuters)