TikTok finalises deal to remain in US with algorithm transfer and new joint venture

TikTok will continue operating in the United States following the finalisation of a long-anticipated deal, announced on 23 January, 2026. The agreement creates a new majority-American-owned entity to manage the app’s US operations and resolves a prolonged regulatory dispute over national security concerns.

The platform, owned by Chinese parent company ByteDance, faced a looming ban unless it divested its US assets by January 2025. The new agreement comes just before the deadline set by US President Donald Trump, who previously delayed enforcement to facilitate a deal.

The joint venture, named TikTok USDS Joint Venture LLC, will operate independently under a seven-member board, the majority of whom are American. It will take control of the app’s US-based algorithm, user data, content moderation, and cybersecurity infrastructure.

Years of regulatory pressure culminate in joint venture

Concerns over TikTok’s ownership emerged in 2020 under Trump's first presidency, with fears that the Chinese government could compel ByteDance to hand over US users’ data. The issue persisted under President Joe Biden, who signed legislation in 2024 mandating a divestiture or outright ban of the platform in the US.

A brief blackout in January 2025 disrupted service to US users, following a legal battle between ByteDance and the US government. However, this was reversed following Trump’s return to office and renewed negotiations.

The finalised structure sees Oracle, Silver Lake, and MGX each holding 15% of the new US venture. ByteDance retains a 19.9% stake. The remaining 35.1% is controlled by a consortium that includes the family office of tech executive Michael Dell and Vastmere Strategic Investments, an affiliate of Susquehanna International Group.

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Algorithm to be retrained on US data

The core of the agreement involves TikTok's algorithm—the app’s proprietary recommendation engine. Under the deal, the algorithm will be licensed from ByteDance and retrained solely on US data. Oracle will store the data within its US-based cloud infrastructure and oversee security.

This transfer of algorithmic oversight follows years of resistance from ByteDance and the Chinese government, who initially opposed relinquishing control of the technology. In September 2025, China’s cybersecurity regulator signalled a softening of that stance, opening the door for licensing rather than full transfer.

TikTok stated the retrained algorithm would meet US regulations and remain under strict safeguards.

Uncertain impact on user experience

While content moderation, user data, and algorithm retraining now fall under US control, other functions such as e-commerce and advertising will continue to be managed by the global TikTok entity under ByteDance.

This split raises questions about how the experience of American users may change. Experts suggest users may notice slower or less accurate content recommendations, especially as the new algorithm diverges from the global model.

TikTok has more than 200 million users in the US, many of whom rely on the platform for entertainment, income, and business visibility. The company has stated that its aim is to maintain a “global TikTok experience” while ensuring US data sovereignty.

Governance and leadership

The new joint venture will be led by Adam Presser, formerly of WarnerMedia, as Chief Executive Officer. Presser previously led TikTok’s efforts to secure US user data. He will be joined by Will Farrell, who assumes the role of Chief Security Officer.

The board includes global TikTok CEO Shou Zi Chew, Oracle Executive Vice President Kenneth Glueck, and executives from Silver Lake, MGX, and Susquehanna International Group.

Trump praised the deal, publicly thanking Chinese President Xi Jinping for his cooperation. In a Truth Social post, Trump said he was “so happy to have helped in saving TikTok”, calling the agreement’s conclusion “dramatic” and “beautiful”.

The Chinese government has not issued a direct statement on the final deal, though last month, Commerce Ministry spokesperson He Yongqian said Beijing hoped for a resolution that complied with Chinese regulations and reflected “a balance of interests”.

Chew also thanked users in a video just hours after the deal was finalised.

Outstanding concerns and future challenges

Despite the agreement, questions remain about whether the deal fully resolves the national security issues that prompted legislative action. The 2024 ban-or-sale law specifically prohibits cooperation between ByteDance and any new US-based operator in algorithm management.

Under the current terms, ByteDance continues to license the algorithm to the US joint venture. This structure may invite further legal scrutiny, particularly around the prohibition of algorithmic interoperability.

The joint venture claims the arrangement preserves “global interoperability”, allowing US creators and businesses to remain connected to TikTok’s international user base. Whether this satisfies lawmakers’ concerns is yet to be determined.

A significant moment in US-China tech relations

The finalisation of the TikTok deal marks a significant juncture in the ongoing technological and geopolitical rivalry between the US and China. It may also serve as a precedent for future cases involving foreign ownership of platforms operating in sensitive markets.

For now, TikTok’s American users can continue accessing the app without disruption, though changes in its recommendation system may gradually become apparent.