TikTok has tentatively agreed to a US investment deal that would restore the ability of Americans to download the popular video app and gain access to real-time updates, according to people familiar with the matter. The action is intended to address national security concerns, while maintaining Americans’ ability to continue using TikTok. It’s the clearest indication so far that a negotiated restructuring may be able to stave off an uglier resolution.
In an internal memo sent to employees, Shou Zi Chew, the chief executive of TikTok, said that the company was ready to move forward with the framework — which includes creating a new U.S. entity with new investors, a large ownership stake held by families that control its current backers and a still-to-be-determined minority position for ByteDance. Though the ultimate cap table could change, talks have revolved around approximately half of the new entity being owned by new investors, about a third by affiliates of existing ByteDance investors and the rest by ByteDance. There are still key regulatory reviews to come.
What This Deal Would Change for TikTok’s US Operations
The speculated structure could help resolve long-standing US officials’ concerns around data access and influence over content recommendations. In practice, that means far more independent governance, tighter control over American user data and clear legal separation from the US business and its China-based parent. Under the terms of the talks, they say, a majority of the board for the US entity would be based in the US and have greater compliance and audit rights.
One unfinalized part is operational separation. TikTok’s ad systems, recommendation engine and commerce tools are strongly tied into ByteDance’s global stack. Even if a new ownership structure were in place, questions would remain about which parts are licensed and which are localized, as well as how an American entity would keep up with product updates without adding security risks. What Oracle would be left doing as part of “Project Texas” — hosting US user data and vetting some pathways through the code — is expected to remain a core element of any eventual deal.
Why Washington Is Watching the TikTok Investment Proposal
American scrutiny of TikTok has come on two fronts: the danger that foreign governments can coerce their way to access sensitive data and the potential for clandestine influence over a platform with massive cultural reach. TikTok says it has not handed over US user data to Chinese authorities and that it would not. But the Committee on Foreign Investment in the United States and the Department of Justice have pushed for a structural fix rather than piecemeal protections.
Scale is the backdrop. TikTok says that it has more than 170 million American users. App usage studies from data.ai regularly find the app at or near the top for time spent. That makes the platform a key conduit for news, entertainment and commerce — and a meaningful piece of the digital advertising market. eMarketer estimates place TikTok’s United States advertising business in the billions of dollars annually — a note of the financial stakes for creators, agencies and brands.
Investors and Regulators on the Griddle in TikTok Deal Review
The investor pool is likely to include a combination of institutional investors and existing backers’ affiliates, who have traditionally included US companies like General Atlantic and Susquehanna International Group. Any deal would also need to be approved, not just by United States authorities, but probably also by the Chinese government, which considers some recommendation algorithms and data-related technologies as export-controlled. That dual review could influence how much technology can be transferred or licensed to the United States entity.
The nuts and bolts of governance will make or break this race. Policymakers have called for independent oversight, enhanced audit rights and the capacity to compel remediation if controls fail. Look for details of how data localization might work, the process by which source code reviews could be conducted and exactly what kind of legal machinery would wall off the US business from instructions that emanate beyond the reach of American courts.
What to Watch Next as the US Reviews the TikTok Deal
Anticipate vigorous review by CFIUS and the Department of Justice, as well as possible conditions on board composition, veto rights over sensitive tech changes and ongoing third-party monitoring. Ad buyers and creators also want clarity around whether ad serving, measurement, and commerce features remain in place during the transition — a major factor in campaign plans and creator earnings.
If completed, the deal would establish a template for how global platforms can thread through geopolitical fault lines: local ownership and domestic data stewardship and independent oversight layered onto a still-global product. The outcome will indicate whether structural remedies can address security concerns without killing off a platform used by tens of millions of Americans each day.
For now, the headline is easy, though: TikTok is indicating that it’s willing to meet regulators more than halfway. The real test will come when these term sheets become binding commitments — and when both Washington and Beijing decide how much control they’re willing to surrender.
