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Stock Markets January 22, 2026

ByteDance Completes U.S. Joint Venture to Prevent TikTok Ban

Majority American ownership and cybersecurity measures aim to secure user data and maintain app availability

By Sofia Navarro ORCL
ByteDance Completes U.S. Joint Venture to Prevent TikTok Ban
ORCL

ByteDance, TikTok's parent company, has reached an agreement to establish a U.S.-based joint venture with majority American ownership to address government concerns and avoid a ban on the widely used social media platform. The move follows years of scrutiny over national security risks associated with TikTok, which boasts over 200 million users in the United States. Key American and international investors, including Oracle, Silver Lake, and MGX, will hold an 80.1% stake, while ByteDance retains 19.9%. The new entity will implement stringent data privacy and cybersecurity protocols to safeguard U.S. user information and the app’s algorithm.

Key Points

  • ByteDance establishes TikTok USDS Joint Venture LLC with majority American ownership to avoid U.S. ban.
  • The joint venture will safeguard U.S. user data, the TikTok app, and its algorithm through enhanced data privacy and cybersecurity protocols.
  • Prominent investors Oracle, Silver Lake, and MGX will collectively hold 80.1% ownership, while ByteDance retains a minority stake.

ByteDance, the Chinese company behind TikTok, finalized an agreement on Thursday to create a joint venture primarily owned by American investors. This strategic alliance seeks to circumvent a potential ban on TikTok in the U.S., a country where the app enjoys significant popularity, with over 200 million users.

This development marks a significant step after a prolonged period of regulatory challenges. Since August 2020, when former President Donald Trump first attempted to prohibit the app over national security issues, TikTok has faced continuous debates concerning user data protection.

The newly formed entity, named TikTok USDS Joint Venture LLC, will be responsible for managing U.S. user data, the application itself, and the sophisticated algorithm that powers content recommendations. According to the company, robust data privacy and cybersecurity measures will underpin these operations to alleviate governmental security concerns.

The investment structure of the new venture includes key American and global stakeholders. Notably, cloud technology leader Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment group MGX will collectively hold an 80.1% stake, ensuring majority control of the U.S. business. ByteDance will maintain a 19.9% ownership interest.

This partnership reflects a concerted effort to balance international investment with strict oversight of sensitive data, aiming to maintain user trust and a stable market presence in the United States.

Risks

  • Ongoing regulatory scrutiny due to national security concerns may continue to pose challenges for TikTok's operations in the U.S.
  • Dependency on maintaining robust cybersecurity measures is critical to protect user data and comply with governmental requirements.
  • Potential changes in U.S. political or legal landscapes could impact the stability and ownership structure of the joint venture.

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