By Iyore Akenzua
ByteDance has moved to reshape TikTok’s presence in the United States while holding firmly onto its most valuable assets. Under a newly established U.S. joint venture, the Chinese technology company will continue to own its recommendation algorithms and intellectual property, remaining the largest single shareholder in the new structure.
TikTok announced that the joint venture has been formally launched to oversee data security and content governance for American users. However, revenue-generating activities such as advertising, marketing and e-commerce will continue to be managed by TikTok’s existing U.S. entities, preserving business continuity.
The arrangement has drawn comparisons with Apple’s 2018 decision to transfer mainland Chinese iCloud data to Guizhou-Cloud Big Data, a government-backed firm. Chinese media have noted a key distinction: Apple held no equity stake in that project, while ByteDance retains both ownership influence and technological authority in TikTok’s U.S. venture.
Under the ownership framework, ByteDance holds a 19.9 per cent stake. Oracle, Silver Lake and MGX each own 15 per cent, while affiliates of existing ByteDance investors collectively control 30.1 per cent. Sources familiar with the matter said the deal has received approval from Chinese regulators.
Beijing had previously opposed any outright sale of TikTok’s U.S. business. In 2020, China updated its export control rules to cover sensitive technologies such as recommendation algorithms, requiring government consent for their transfer — a move widely interpreted as aimed at protecting TikTok’s core technology.
According to TikTok, the joint venture will retrain its content recommendation system using U.S. user data, operating under a technology licence from ByteDance. The same safeguards will also extend to other ByteDance-owned apps in the U.S., including CapCut and Lemon8.
Despite regulatory concessions, ByteDance is expected to maintain substantial financial returns. Earlier reports indicated the company would continue to receive about half of the profits from TikTok’s U.S. operations under the new structure.
Analysts say the deal removes a major regulatory cloud hanging over ByteDance’s U.S. business. Lub Bun Chong, a partner at C Consultancy and Helios Strategic Advisors, said the outcome significantly reduces uncertainty and could support stronger valuations across Western markets.
Private market estimates suggest ByteDance’s valuation rose to around US$500 billion ahead of the agreement, up from roughly US$400 billion in mid-2025. The U.S. joint venture alone has been valued at approximately US$14 billion.
Operational changes have so far been minimal. Employees familiar with TikTok’s U.S. operations said daily workflows remain largely unchanged, though Adam Presser, the newly appointed chief executive of the joint venture, now operates under a separate corporate structure.
The venture’s board includes TikTok CEO Chew Shou Zi alongside senior executives from Oracle, Silver Lake, MGX, Susquehanna International Group and TPG Capital. Raul Fernandez, CEO of DXC Technology, serves as an independent director and chairs the security committee.
Supporters of the structure argue it preserves TikTok’s operational stability while addressing U.S. security concerns. Critics, however, particularly within the Republican Party, continue to question whether the arrangement complies with a 2024 U.S. law that required TikTok’s American operations to have no operational ties to ByteDance.
At the centre of the debate is TikTok’s algorithm — the key driver of its global success. After ByteDance integrated its recommendation technology into Musical.ly following the acquisition, user engagement surged, underscoring the strategic value of the algorithm.
Under the new agreement, U.S. user data will be stored on Oracle’s secure cloud infrastructure. While intended to reassure regulators, the setup has revived scrutiny of Oracle’s earlier involvement in “Project Texas,” a previous attempt to resolve U.S. concerns over TikTok’s ownership and data security.
