TikTok Finalizes US Business Separation Deal with American Investors to Avoid Ban

TikTok has officially closed a significant deal that establishes a new independent US entity, TikTok USDS Joint Venture LLC, allowing the platform to continue operating in the United States without facing a ban. This agreement concludes years of tension between Washington and Beijing over national security risks tied to ByteDance, TikTok’s Chinese parent company. Concerns centered on potential data access by the Chinese government and the influence of TikTok’s recommendation algorithm. Under the deal, ByteDance retains only a 19.9% stake, while the majority (80.1%) is held by American and allied investors. Key managing investors include Oracle (15%, responsible for data security and algorithm oversight in US cloud environments), Silver Lake (15%), and MGX (15%, an Emirati firm). Additional stakes go to groups linked to Michael Dell, Susquehanna International Group (co-founded by Trump ally Jeff Yass), and others. The board is majority American, with TikTok’s global CEO Shou Zi Chew included. The critical algorithm, often called the app’s ‘secret sauce’ for its addictive content recommendation, will now be licensed and retrained exclusively on US user data to comply with American regulations, potentially altering its performance and user experience compared to the global version. The deal follows earlier attempts during Trump’s first term, a 2024 law signed by Biden mandating divestiture, a brief outage in January 2025, and repeated postponements by Trump after his re-election. Trump has publicly celebrated the outcome as a success. Experts note that while this enhances data protection, the shift to US-only training data may result in a less refined algorithm, possibly making the app slower or less engaging for its 200 million US users. The arrangement aims to balance business continuity with national security safeguards.