A consortium led by Oracle and Silver Lake finalizes a deal to control TikTok's US arm, resolving national security concerns and averting a nationwide ban.
SAN FRANCISCO - In a decisive move to avert a nationwide ban, TikTok's parent company ByteDance has agreed to cede control of its U.S. operations to a newly formed entity led by Oracle and a consortium of American investors. The agreement, confirmed on December 19, 2025, establishes "TikTok USDS Joint Venture LLC," a structure designed to satisfy stringent U.S. national security requirements while keeping the popular video app accessible to its 170 million American users.
The deal marks the culmination of a years-long geopolitical standoff over data privacy and foreign influence. According to reports from CNBC and TechCrunch, the transaction values the new U.S. venture at approximately $14 billion. Under the terms of the agreement, U.S.-based entities will effectively control 80.1% of the company, leaving China-based ByteDance with a minority stake of 19.9% and no direct operational control over American user data.
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The ownership structure is meticulously engineered to address the concerns of the Committee on Foreign Investment in the United States (CFIUS). The joint venture will be 50% owned by a new investor group, which includes Oracle, Silver Lake, and Abu Dhabi's MGX, each holding a 15% stake. The remaining ownership lies with existing U.S. investors of ByteDance, consolidating American influence over the platform.
Oracle's role extends far beyond equity ownership. Designated as the "Trusted Security Partner," the cloud giant is tasked with hosting all U.S. user data on its Oracle Cloud Infrastructure. Furthermore, Oracle will assume responsibility for auditing the platform's algorithms and validating compliance with national security terms. This includes rigorous oversight of content moderation protocols and software assurance to prevent foreign backdoors.
"The new joint venture will prevent TikTok from shutting down in the U.S. due to national security concerns," reported CNBC, noting that Oracle stock jumped 7% following the announcement.
This resolution follows intense legislative pressure. In April 2024, the U.S. Congress passed a law mandating that ByteDance divest its U.S. assets or face a total ban. The legislation was driven by fears that the Chinese government could compel ByteDance to hand over American user data or manipulate the content algorithm for propaganda purposes.
Throughout 2024 and 2025, TikTok attempted to mitigate these fears through "Project Texas," a $1.5 billion initiative to isolate U.S. operations. However, regulators deemed these internal measures insufficient without a structural change in ownership. The finalized deal, expected to close in January 2026, appears to satisfy the legal requirements for divestiture.
While markets have reacted positively, with Oracle positioned as a major beneficiary, the deal has drawn scrutiny regarding the technical realities of separating TikTok's core technology. Experts question the extent to which the recommendation algorithm-the "secret sauce" of the app-can truly be decoupled from Beijing.
According to Reuters, it remains unclear whether the algorithm has been fully transferred or merely licensed, with Oracle providing monitoring services. Critics, including privacy advocates cited by TIME, warn that the arrangement might simply swap one form of surveillance for another, as domestic data collection practices by U.S. tech giants remain a contentious issue.
The establishment of TikTok USDS Joint Venture LLC sets a significant precedent for the "splinternet"-the fragmentation of the global internet along geopolitical lines. It demonstrates that the U.S. government is willing to force corporate restructuring to secure digital sovereignty.
For Oracle, the deal is a massive victory for its cloud business, validating its infrastructure capabilities against larger rivals like Amazon Web Services and Microsoft Azure. Managing the data of 170 million active users offers both a lucrative revenue stream and a high-profile case study in data sovereignty management.
As the deal moves toward its expected close in January 2026, the focus will shift to implementation. Oracle will need to demonstrate that it can effectively wall off U.S. data and audit code updates in real-time without degrading the user experience. Meanwhile, ByteDance retains a 19.9% stake and a board seat, ensuring it stays financially connected to the platform's success, even as its operational grip loosens.
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