According to TechRepublic, TikTok has closed a deal to split its US operations into a new entity, TikTok USDS Joint Venture LLC, ending the ban threat from a 2024 law. The joint venture is majority-owned by American and international investors like Oracle, Silver Lake, and MGX, each holding 15%, while ByteDance retains a 19.9% minority stake. Oracle will now secure US user data and oversee changes to TikTok’s core algorithm, which has been licensed and will be retrained using only US data. The political saga, which began under Trump and saw him broker the final compromise, concluded just days before a widespread US outage affected tens of thousands of users, according to reports on Downdetector. This outage happened right after TikTok rolled out new US-specific terms of service and privacy policies reflecting the corporate restructuring.
The political fix is in
So, the immediate political crisis is over. Washington gets to say it “solved” the national security problem without actually banning an app used by over 200 million Americans. And Trump gets to take a victory lap on social media. It’s a classic political compromise: create a new corporate structure that looks independent on paper, with a board full of American directors and a CEO, Adam Presser, from WarnerMedia. But here’s the thing: ByteDance still owns a 19.9% stake, and global CEO Shou Zi Chew still has a board seat. That’s a pretty thin firewall. You have to wonder if lawmakers, who are already signaling scrutiny, will truly buy that this arrangement neuters Beijing’s potential influence. It feels more like a temporary ceasefire than a permanent peace treaty.
Oracle’s big and risky role
The real linchpin in this whole deal isn’t the boardroom—it’s Oracle. They’re not just a cloud host; they’re now the algorithmic watchdog. They’re responsible for both housing the data and overseeing changes to the recommendation engine, that “secret sauce” everyone’s so worried about. This is an insane amount of power and responsibility handed to a third-party vendor. And it immediately raises a ton of practical questions. How do you “oversee” an algorithm? What does “retraining it on only US data” actually do to the user experience? Some experts think the US TikTok could start to feel like a different app, and they’re probably right. Algorithms are fragile. Tinkering with the inputs and the oversight could break the magic that made it beat Instagram Reels and YouTube Shorts.
A wobbly start for users
And then, bam. Days after the new terms go live, the app goes down for thousands of people. Videos lag, feeds won’t refresh, the whole thing grinds to a halt. Talk about bad timing. Now, TikTok hasn’t blamed the transition for the outage, and apps go down sometimes. But come on. The symbolism is too perfect. It’s a visceral reminder to every user that this isn’t just a corporate paperwork shuffle. There’s a massive, complex technical infrastructure being pulled apart and reassembled in real-time. When you hand the keys to your core algorithm and data systems to a new entity, stuff breaks. For creators and advertisers watching closely, this outage is a scary preview. If the algorithm gets glitchy or the platform becomes less reliable, their reach and revenue are directly on the line.
Survived the ban, can it survive itself?
So TikTok survived the political war. But the business war is just entering a new phase. The pressure now shifts from Capitol Hill to the server room and the boardroom. Can Oracle manage this unprecedented role without causing more disruptions? Will the “US-only” algorithm remain as addictive, or will users slowly drift away? The deal traded an existential threat for a thousand operational and experiential risks. The weekend outage might just be the first stumble of many. Basically, they dodged a bullet, but now they have to run a gauntlet. And the users, scrolling through it all, are the ones who will ultimately decide if the new, American-supervised TikTok is still the TikTok they love.
