According to MacRumors, TikTok has agreed to sell its U.S. operations to an investment consortium that includes Oracle, Silver Lake, and the UAE-based MGX. The new entity, called “TikTok USDS Joint Venture LLC,” will own 45 percent of TikTok, while ByteDance will retain close to 20 percent, with existing investors holding the rest. This group will be responsible for U.S. data protection, content moderation, and algorithm security, specifically tasked with retraining the content algorithm on U.S. data. The deal is structured to comply with the 2024 Protecting Americans From Foreign Adversary Controlled Applications Act, which demanded ByteDance divest TikTok’s U.S. operations. The agreement is officially set to go into effect on January 22, 2026, following a series of extensions to a potential ban that began back in January 2025.
The Not-Quite-A-Sale Sale
Here’s the thing: calling this a “sale” is a bit of a legal fiction. ByteDance isn’t cashing out and walking away. They’re keeping a significant 20 percent stake, and the new U.S. entity only gets 45 percent. So who controls TikTok? It’s messy. The agreement states the USDS Joint Venture will operate as an independent entity with authority over U.S. data and content. But the global product, including ads and e-commerce, is still managed by TikTok’s global teams. It’s a forced partnership, not a clean break. Oracle’s role as the compliance auditor is the key for U.S. officials—they get to peek under the hood and validate that data isn’t flowing to China and the algorithm isn’t being manipulated. But does this truly sever Beijing’s potential influence? That’s the multi-billion dollar question.
The Algorithm Reboot
The most technically fascinating part of this deal is the mandated “retraining” of TikTok’s famed recommendation algorithm. The U.S. group has to essentially reboot it using only U.S. user data. On paper, this walls it off from any global training data that might contain foreign influence. But in practice, it’s a huge challenge. Algorithms are complex beasts; isolating and retraining one component without affecting the global product’s interoperability is a massive engineering task. And let’s be honest, the “For You” page’s magic is its hyper-personalization, which relies on a deep, wide pool of data. A U.S.-only data set might change the feel of the app. Will it be as addictive? That’s an open experiment that millions of users will unwittingly participate in come January.
A Political Blueprint
This deal doesn’t just save TikTok in the U.S. It probably creates a template. We’re entering an era of digital sovereignty, where data and the algorithms that shape it are seen as national assets. This structure—a domestic-led consortium taking a controlling stake in the local operations of a foreign app, with a trusted tech partner (like Oracle) acting as watchdog—could be applied to other platforms in the future. It’s a compromise that avoids an outright ban, which is politically messy and unpopular, but still attempts to address national security hawks. So, it’s a landmark. But it’s also a bureaucratic Frankenstein. Making this “independent entity” actually work, day-to-day, with the global company that still owns a big piece of it and runs the rest of the world? Good luck to everyone in those Monday morning meetings.
