According to PYMNTS.com, TikTok CEO Shou Zi Chew announced a deal that will allow the app to continue U.S. operations by forming a new U.S. joint venture, set to close on January 22, 2025. The framework, deemed a “qualified divestiture” by an executive order from President Donald J. Trump on September 25, 2025, mandates that the venture be majority-owned by American investors and governed by a seven-member, majority-American board. A consortium of new investors—Oracle, Silver Lake, and MGX—will each hold 15%, totaling 50% of the venture. Affiliates of existing ByteDance investors will hold 30.1%, while ByteDance itself retains a 19.9% stake. The joint venture will specifically oversee U.S. data protection, algorithm security, and content moderation, with U.S. user data stored domestically by Oracle. This move complies with a law signed by President Joe Biden in April 2024 that threatened a ban unless ByteDance sold its stake.
The Deal Is The Divestiture
Here’s the thing: this isn’t a traditional sale. It’s a corporate restructuring that technically meets the letter of the law. ByteDance is going from being the outright owner to a significant minority shareholder (19.9%) in the entity that runs TikTok in the U.S. But with American investors holding 50% and a U.S.-led board, the government is basically calling that “good enough” to resolve national security concerns. It’s a political and legal compromise, one that seemed to gain momentum after Trump’s return to office. Remember, he had tried to force a sale back in 2020, but his approach this time, via executive order, has provided the off-ramp. The White House fact sheet frames it as a win, saving the app while protecting security. So, for 170 million American users, the immediate panic is over. The experience “today” continues, as Chew promised.
Stakeholder Whiplash
For users, it’s simple: the app doesn’t disappear from their phones on January 23rd. For advertisers and creators, it’s a massive sigh of relief—business continuity is assured, for now. But look closer. The real interesting shift is in control. A new, separate U.S. entity will now manage the core pillars of trust: where data sits (with Oracle), what content gets moderated, and even the integrity of the algorithm itself. That’s huge. It creates a formal, legal firewall between the U.S. operation and ByteDance’s global engineering and product teams. Will that firewall slow down innovation or global feature rollouts? Possibly. TikTok Global’s U.S. entities will still handle commerce and ads, so the money-making machine stays integrated. But the oversight is now bifurcated. It’s a messy, complex governance solution, but maybe the only one that was ever going to be politically palatable and legally defensible.
A Precedent For Digital Sovereignty?
This saga, which has dragged on for years, sets a wild precedent. We’ve effectively seen the U.S. government mandate the creation of a nationally sanctioned version of a global tech platform. The model isn’t a full ban, nor a clean sale. It’s a forced partnership. You have to wonder: is this the new template for how powerful nations handle foreign-owned apps they deem critical? It’s a blend of data localization, boardroom oversight, and source code review. For enterprises and markets, it introduces a new layer of geopolitical risk into tech investments. If you’re a venture firm or a cloud provider like Oracle, getting involved means you’re now part of a national security compliance structure. That’s a heavy lift. But for everyone else? It’s back to business, making TikToks, running campaigns, and trying to go viral. The drama moves from the headlines to the boardroom and the server racks, which is probably where it should have been all along.
