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TikTok has officially finalized a deal to transfer its American operations into a new, majority US-owned entity, effectively ending years of legal battles and a looming nationwide ban.
The newly established TikTok USDS Joint Venture LLC will operate as an independent firm, allowing the short-video app to continue serving its 200 million American users under a structure designed to satisfy federal national security requirements.
The finalized ownership structure grants a consortium of American and global investors an 80.1% stake in the new business, while the Chinese parent company, ByteDance, retains a minority 19.9% share.
This specific threshold is critical, as it ensures ByteDance stays below the 20% ownership limit mandated by US divestiture laws.
Cloud computing giant Oracle, private equity firm Silver Lake and Abu Dhabi-based AI investor MGX serve as the three managing investors, with each holding a 15% stake in the venture. Other notable backers include the Dell Family Office and affiliates of Susquehanna International Group.
A central component of the agreement involves TikTok’s proprietary recommendation algorithm, often described as its “secret sauce.” Rather than a full sale, ByteDance will license the algorithm to the US entity.
Under the supervision of Oracle, which acts as the “trusted security partner,” the algorithm will be housed in a secure US cloud environment and completely retrained using only American user data.
This process is intended to ensure the content feed remains free from foreign manipulation or outside influence, though experts suggest it could result in a “lighter” or different user experience compared to the global version of the app.
The joint venture is led by CEO Adam Presser, formerly TikTok’s head of operations and Chief Security Officer Will Farrell. They report to a seven-member, majority-American board of directors that includes TikTok global CEO Shou Zi Chew, alongside executives from Oracle and Silver Lake.
President Donald Trump, who repeatedly delayed the ban to facilitate these negotiations, welcomed the news on social media, thanking Chinese President Xi Jinping for his role in approving the deal. The agreement also extends its security protocols to other ByteDance-owned apps in the US, including CapCut and Lemon8.
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