TikTok has come to an agreement to sell itself to a newly formed American company, putting an end to the bizarre dance of President Trump’s attempt to force the sale of the business and ending a ban threatened by the White House. The offer, which was detailed in an internal memo by CEO Shou Zi Chew on Wednesday but hasn’t been previously reported and was confirmed to CNN after Axios first broke the story Monday, would bring the platform into closer compliance with a U.S. order that requires divestment or imposes a nationwide ban.
Though closing conditions are still pending, the agreement marks an about-face after multiple threats, court challenges, and geopolitical turmoil. By challenging the right of cross-border services to keep a tight grip on data, algorithms, and government scrutiny, the decision could reshape the way apps like TikTok are covered by regulations for years to come.
- Inside the deal shaping TikTok’s US joint-venture sale structure
- Why Washington pushed for a sale and threatened a nationwide ban
- What it means for users and creators as TikTok shifts to US control
- Regulatory and geopolitical hurdles that could still derail approval
- What to watch next as divestiture terms face review and implementation
Inside the deal shaping TikTok’s US joint-venture sale structure
The U.S. company will be the American operations of a new entity to be called TikTok USDS Joint Venture LLC. The memo described by Axios shows Oracle, Silver Lake, and Abu Dhabi-based MGX as a combined entity that would own 45%. Existing ByteDance investors will own nearly one-third through their affiliates, while ByteDance itself would maintain a stake of just under 20%.
This architecture would provide for control of the platform by placing it under American purview, while ensuring that the operations on its end are not severely disrupted. The joint venture will manage U.S. data protection, algorithm security, content moderation, and software assurance. Critically, TikTok’s recommendation engine will also be reprogrammed to strengthen sanctions from the outside—a move in line with earlier discussions on “Project Texas,” which made Oracle a central player on infrastructure and compliance.
Why Washington pushed for a sale and threatened a nationwide ban
U.S. officials have worried that foreign ownership of a leading social app could give another country access to Americans’ personal data, or facilitate covert influence efforts on the American electorate. The Committee on Foreign Investment in the United States (CFIUS) conducted an extensive review, and a federal law passed last year set a “divest or ban” standard for apps controlled by foreign adversaries specifically. A court-validated extension that the company won in June gave TikTok more time to seek a “qualified divestiture.”
That pressure increased after a string of state-level limitations, federal guidance on device usage, and bipartisan hearings examining the impact and governance of social platforms. The U.S. push is also indicative of a larger global movement; regulators in the EU, UK, and other places have been tightening rules around platform accountability, child safety, and data flows, raising the cost of noncompliance across borders.
What it means for users and creators as TikTok shifts to US control
In the short term, most users should experience little disruption. Continuity is the linchpin of the plan — keep the app operating, ads flowing, and creator tools in place while moving sensitive functions into a U.S.-controlled joint venture. The promise to retrain the recommendation algorithm on U.S. data is an attempt to build trust in the “For You” feed, and lower perceived risks of outside manipulation.
The stakes are substantial. TikTok says it has about 170 million users in the United States and millions of U.S. businesses, from big furniture retailers to plumbers and house cleaners. Insider Intelligence projects that TikTok’s ad revenue would reach the high single-digit billions in the U.S. annually, a reflection of why advertisers have pressed for regulatory clarity on its issues. Any material change to data access, measurement, or targeting will be watched closely by advertisers and creators that depend on stable reach and monetization.
Regulatory and geopolitical hurdles that could still derail approval
The deal still needs to navigate a gantlet of approvals and possible legal challenges. CFIUS will look at governance, data localization, and technical safeguards. If the divestiture terms or statutory authority were sued over by opposing parties, U.S. courts could get involved. On the other side of the firewall, Chinese regulators have historically regarded recommendation algorithms and other data-based technologies as export-controlled assets which could constitute a chokepoint for any sort of transfer or retraining commitments.
Governance will be pivotal. Look for questions about board independence, audit rights, limits on access to data for shareholders, and the scope of inspections of third-party code. Lawmakers are also expected to demand more ongoing reporting — of compliance, independent security assessments, and what corporate officials told the public after an incident is discovered — so that those assurances from the deal become real protections.
What to watch next as divestiture terms face review and implementation
Three signposts will tell us whether this deal clears up the stalemate: Regulatory approvals without significant carve-outs; clear technical separation of U.S. user data and models with oversight from independent auditors; and stability in how creators and advertisers continue to make money during a transition.
If those pieces fall into place, the deal could serve as a template for how to address platform risks without stripping consumers of choice. If not, the saga could enter another round — one with more lawyers, more audits, and a sharper focus on how algorithms and data flow across borders in a time marked by digital sovereignty.
