TikTok has avoided a potential ban in the United States at least for now. Parent company ByteDance has agreed to spin off TikTok’s American operations into a new entity called TikTok USDS Joint Venture LLC, handing majority control to a group of investors led by US-based firms.
Majority stake to Oracle, Silver Lake, and MGX
In a memo sent to employees, TikTok CEO Shou Zi Chew confirmed that three managing investors Oracle, Silver Lake, and Abu Dhabi’s MGX have signed on to lead the new venture. While MGX is foreign-based, the structure is still being framed as American-led, mirroring a group previously floated during stalled talks with US regulators.
Ownership of the new entity breaks down as follows:
- Oracle, Silver Lake, MGX: ~45% combined
- ByteDance investor affiliates: ~30.1%
- ByteDance itself: 19.9%
The joint venture will begin operation on January 22, just one day before a key executive order deadline that would have reactivated enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act.
A new board, a new algorithm safeguards
The USDS entity will be governed by a seven-member board, with the majority of directors expected to be US nationals. This is meant to ease concerns around foreign oversight and possible content manipulation.
Chew said the company will retrain the algorithm using American user data to prevent outside influence on the recommendation system. However, how the system stays isolated from ByteDance’s global infrastructure is still unclear.
TikTok avoids shutdown, for now
The move gives TikTok’s 170 million US users short-term stability. Regulatory pressure and political scrutiny have followed the platform for years.
The new structure aims to ease national security concerns from lawmakers. At the same time, it keeps ByteDance’s minority stake and daily operations intact.
With Oracle’s infrastructure playing a central role, and American firms now leading TikTok’s US branch, the company may have threaded the needle. But questions about algorithm transparency and long-term independence aren’t likely to disappear anytime soon.
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