TikTok has agreed to sell a stake in itself to a group of American investors led by the Silicon Valley venture capital firms General Atlantic and Sequoia Capital, according to two people with knowledge of the deal who were not authorized to speak about it publicly. It would be an attempt to satisfy both the demands of China and President Trump.
The agreement, reported earlier by Axios, redraws the governance of the platform in its largest advertising market even as it tries to firewall American user data and an algorithm for making recommendations from foreign influence.
Who Is Taking Control of TikTok’s New U.S. Operations
The new deal hinges on a new U.S. company, TikTok USDS Joint Venture LLC, that will control most of the app’s operations in the United States. Oracle, private equity shop Silver Lake and Abu Dhabi-based AI investor MGX will together own 45% of the U.S. business, according to a transaction memo reviewed by multiple media outlets. ByteDance, TikTok’s parent company, will keep a stake of under 20%, and the rest is to be spread among other investors.
Oracle’s elevated role is notable. The cloud provider has been hosting U.S. TikTok data under a program known colloquially as “Project Texas.” In the new arrangement, Oracle is cast as the “trusted security partner” in charge of auditing and validating compliance with what were once national security terms — an embodiment of the gatekeeper role that Washington had sought.
What the Proposed TikTok Deal Covers and Secures
The joint venture will have oversight over everything regulators care about most: data protection, algorithm security, content moderation and software assurances. In practice, that often translates to storing data in the U.S. only, enforcing access controls for engineers, requiring independent code reviews and using monitoring tools to keep an eye on how sensitive systems are being used. Count on guardrails to be put around who can see, view and tune the recommendation algorithm, as well as even more extensive logging that shows regulators who touched what, when and why.
Governance will also be key. Such deals typically require independent boards with security clearances, a compliance officer who reports to U.S. authorities, and the authority to stop product changes that could open them to data protection failures. Though not all of the details are public, the fact that the memo highlights software assurance and auditing points to a mandate giving the U.S. entity expansive authority to issue binding security decisions.
Why Washington Sought This National Security Structure
U.S. policymakers have long argued that TikTok’s Chinese ownership could put U.S. user data at risk, under the laws that can force companies to assist government requests for information or data, even abroad. The C.F.I.U.S. process and lawmakers from both parties sought a structural remedy: construction of separated U.S. operations, to restrict foreign access to data and key systems and put an American security partner in charge of verification.
The stakes are enormous. TikTok says it has around 170 million users in the U.S., a scope that brings it alongside the largest American social platforms. The app has found a strong foothold among younger users, according to the Pew Research Center, and TikTok’s U.S. ad revenue is estimated by Insider Intelligence to be in the high single-digit billions annually. Any interruption would send ripples through creators, advertisers and the wider media economy.
What It Means for Users, Creators, and Advertisers
Everyday users won’t notice much difference in the app experience. The heavy lifting is behind the scenes: stricter rules for how and when Oracle staff can access customer code or analytics, and a paper trail intended to be satisfying for government auditors. For creators and brands, the deal may represent a form of stability — ending uncertainty that has at times cooled ad budgets and product launches.
Advertisers will be watching for changes to measurement and data-sharing. Tougher control may change how performance data is piped to third parties, but companies have already adjusted to similar shifts across social platforms as privacy rules grew stricter. If anything, a concrete compliance regime may make CMOs more comfortable committing large budgets to TikTok’s short-form video reach.
Open Questions and Key Issues to Watch Next
There are still some pieces left to click into place. Government approval, and a national security agreement that works, will codify the line-by-line requirements: localization details (at what level?), algorithm auditing coverage (how much?), code escrow and incident reporting timeframes. Investors will seek clarity on governance mechanics — for instance, whether an independent U.S. board could overrule some of the engineering decisions and how disagreements between the joint venture and ByteDance are resolved.
Another thing to watch is how “trusted partner” auditing actually operates. Continuous monitoring of access to developers, red-teaming recommendation systems, and third-party auditing of content moderation pipelines are all possible but resource-intensive. Clear, published transparency reports — guided by existing frameworks from NIST and best practices from CISA — would work to rebuild public trust.
Finally, this is a precedent. If regulators believe this structure is adequate, it could serve as a template for other foreign-owned apps in sensitive industries. If not, you can count on the demand for stricter restrictions — from harsher divestiture thresholds to outright bans if compliance proves illusory.
The bottom line: The compromise shifts TikTok’s true control to U.S. hands, without turning off the app. The success of this model will rely less on headlines and more on the painstaking implementation of security, auditing and governance — the quiet plumbing that determines whether trust can actually become verifiable at scale.
