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A proposed deal would shift 80% of TikTok's US operations to a consortium of US investors, with Oracle managing US user data. While the restructuring aims to address national security and data privacy concerns, significant risks remain, particularly regarding the app's recommendation algorithms and potential for influence operations. Security experts warn that enterprise risks, such as data leakage and social engineering, will persist even after the deal.
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President Donald Trump signed an executive order authorizing a plan for U.S. investors to acquire majority control of TikTok’s U.S. operations, aiming to resolve longstanding national security concerns regarding the platform’s Chinese ownership. TikTok, owned by ByteDance, has over 170 million American users and is a major platform for content creators and businesses. The U.S. government has expressed concerns that the Chinese government could access American user data or use the platform for propaganda, leading to a brief ban in January and subsequent executive actions to delay enforcement while a divestiture plan was negotiated. The newly approved framework establishes a U.S.-based joint venture to operate TikTok, Lemon8, CapCut, and related apps in the United States, with U.S. persons holding majority ownership and control. ByteDance and its affiliates will retain less than a 20% stake in the new entity, and will be excluded from security-related decisions. The deal is structured to comply with the 2024 Protecting Americans from Foreign Adversary Controlled Applications Act, which mandates divestiture or a ban for applications deemed national security threats. Oracle, Andreessen Horowitz, and Silver Lake are among the U.S. investors involved, with Oracle specifically tasked with hosting user data, retraining the algorithm, supporting application development, and conducting source-code reviews. All U.S. user data will be stored in an American-run cloud environment, and U.S. security partners will monitor software, algorithms, and data flows to ensure compliance. The agreement also stipulates that U.S. entities will have full control over algorithms, code, and content moderation for the American version of TikTok. ByteDance will have only one representative on the board of the new entity, without influence over security matters. The deal still requires approval from the Chinese government, though President Trump has stated that President Xi Jinping has agreed in principle, pending further confirmation. The divestiture is intended to remove TikTok and related applications from the control of a foreign adversary, as defined by U.S. law. The restructuring aims to allow TikTok to continue operating in the U.S. while addressing concerns about data privacy and foreign influence. The plan includes intense monitoring of software updates and recommendation models to prevent unauthorized access or manipulation. The move is seen as a significant step in balancing national security interests with the economic and social importance of TikTok to American users and businesses. The outcome of the Chinese government’s review will determine the finalization of the deal. If completed, the new structure will set a precedent for how the U.S. handles foreign-owned technology platforms deemed security risks. The agreement also covers related apps and websites, ensuring a comprehensive approach to data protection and platform governance.
Jun 29, 2026
ByteDance has agreed to transfer majority ownership of TikTok to a group of US-based investors and allies, including Oracle, Silver Lake, and MGX, following prolonged negotiations and legal pressure from US lawmakers. Under the terms of the deal, US entities will control 80.1% of TikTok, while ByteDance retains a 19.9% stake and one board seat. Oracle will serve as a "trusted security partner," responsible for safeguarding US user data and ensuring that China-based ByteDance has no access to sensitive information or influence over the algorithm for US users. The agreement establishes TikTok's US operations as an independent entity with authority over data protection, algorithm security, content moderation, and software assurance. All US data will be stored in a secure cloud environment managed by Oracle. ByteDance will continue to manage global product interoperability and certain commercial activities, but the new structure is designed to address national security concerns about potential Chinese government access to US user data and content manipulation.
Jun 29, 2026
TikTok announced the creation of **TikTok USDS Joint Venture LLC** to keep operating in the U.S. under a September 2025 executive order. Under the arrangement, **ByteDance would reduce its ownership to 19.9%**, with majority ownership shifting to majority-American investors; TikTok said the new entity will implement national-security safeguards including U.S.-based data protections and controls around the recommendation algorithm. The company stated that U.S. user data and algorithm security will be supported via **Oracle’s U.S. cloud environment**, and that the joint venture will run a cybersecurity and privacy program aligned to frameworks such as **NIST CSF**, `NIST 800-53`, and **ISO 27001**, with third-party auditing/certification; TikTok said similar safeguards would extend to other U.S.-available apps such as **CapCut** and **Lemon8**. Separately, a policy commentary argued that the TikTok controversy highlights the lack of consistent U.S. standards governing **foreign-owned apps**—particularly around **data ownership/access** and **algorithmic oversight**—and called for clearer, enforceable requirements (e.g., upfront disclosure of who owns collected data and how users can opt out). While it does not add new incident details about TikTok’s joint venture, it frames the broader national-security and consumer-protection rationale for establishing uniform rules for foreign-based software providers operating in the U.S., citing TikTok and other China-linked apps as examples.
Jun 29, 2026