US, China seal TikTok deal after yearslong battle, algorithm control still unclear: Report

TikTok’s Chinese parent, ByteDance, has finalised a deal to place the app’s US operations under a new majority American-owned joint venture, effectively averting a nationwide ban on the short-video platform used by more than 200 million Americans.

The agreement marks a major milestone in a dispute that began in August 2020, when then US President Donald Trump first attempted to ban TikTok over national security concerns related to data access and foreign influence.

Under the deal, a newly formed entity—TikTok USDS Joint Venture LLC—will be responsible for securing US user data, applications, and TikTok’s powerful recommendation algorithm through enhanced data privacy and cybersecurity safeguards, the company said.

More from Business

London sky goes grey: Soaring energy prices bring back firewood in chimneys in UK homes Donald Trump sues JPMorgan Chase and CEO Jamie Dimon for $5 billion over alleged debanking

American and global investors will collectively hold a controlling 80.1 per cent stake in the new venture. These include Oracle, private equity firm Silver Lake, and MGX, an Abu Dhabi-based investment firm focused on artificial intelligence. ByteDance will retain a 19.9 per cent minority stake.

The structure aligns with an earlier agreement outlined by TikTok CEO Shou Chew, who had said in December that while a binding deal had been signed with investors, regulatory approvals were still pending. With the transaction now finalised, it clears a major obstacle in US-China relations amid broader geopolitical tensions.

The deal also meets a January 22 deadline set by the Trump administration under an executive order that granted a temporary 120-day pause on enforcement of a federal ban.

Quick Reads

View All

Can Vande Bharat be a model for the world? India’s bet on affordable modern rail

China rolls out $72 bn loan backstop, but can it revive its flagging private sector?

In 2024, former President Joe Biden signed legislation requiring ByteDance to divest TikTok’s US business or face a ban, citing national security risks.

While financial details were not disclosed, US Vice President JD Vance had previously said the transaction could value TikTok’s US business at around $14 billion. It remains unclear how much ByteDance ultimately received or how ownership of TikTok’s algorithm has been ring-fenced, a key sticking point that derailed earlier negotiations.

According to Chew’s memo, the new US entity will be governed by a seven-member board with a majority of American directors and will exercise independent control over data protection, content moderation, and algorithm security.

US authorities, Oracle, and Silver Lake did not immediately comment on the finalised structure. A spokesperson for the Chinese embassy in Washington said Beijing’s position on TikTok “has been consistent and clear,” without offering further details.

The agreement closes one of the most high-profile tech disputes between Washington and Beijing, bringing regulatory certainty to TikTok’s US operations after nearly five years of legal and political uncertainty.