New joint venture separates American data from Chinese parent company control
The uncertainty surrounding TikTok’s future in the United States has finally ended. On Thursday, the popular short-video platform announced it has closed a crucial deal to split its US operations from its global business. This move saves the app from a looming nationwide ban that was set to take effect this month.
For years, Washington and Beijing have been locked in a tense standoff regarding the app. US officials feared that TikTok’s Chinese owner, ByteDance, could be forced to hand over American user data to the Chinese government. These national security concerns led to legislation signed by President Joe Biden in 2024, demanding that ByteDance sell the app or face a shutdown.
New Ownership and "Secret Sauce"
Under the new agreement, a completely independent entity named TikTok USDS Joint Venture LLC has been formed. This new company will be majority-owned by American and international investors, significantly reducing ByteDance’s influence.
A key part of this deal involves TikTok’s famous recommendation algorithm—the "secret sauce" that keeps users glued to their screens. This powerful formula will now be licensed to the US owners and retrained exclusively on American data. Experts suggest this might slightly change the user experience, potentially making the US app feel different from the global version over time.
Trump’s Role in the Deal
President Donald Trump, who once tried to ban the app during his first term, has claimed credit for saving it this time around. He expressed satisfaction on social media, stating he was happy to help save the platform. Trump’s ally, Larry Ellison of Oracle, played a significant role in finalizing the structure that keeps the app running for its 200 million American users.
