For five years, the world's most popular social media app lived under a death sentence. TikTok, used by 170 million Americans, faced repeated ban threats from two administrations convinced its Chinese ownership posed an unacceptable national security risk. On January 23, 2026, that uncertainty ended: TikTok USDS Joint Venture LLC became operational, transferring 80.1% ownership to American and allied investors while ByteDance retained a non-controlling 19.9% stake.
The deal represents the largest forced divestiture of a foreign-owned technology company in U.S. history. Oracle will retrain TikTok's recommendation algorithm using only American user data, severing the connection to Beijing that lawmakers called an intelligence threat. ByteDance loses all access to U.S. user information. Whether the new structure preserves what made TikTok dominant—or creates a fundamentally different product—remains to be seen.
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Jane Addams
(1860-1935) ·Progressive Era · social reform
Fictional AI pastiche — not real quote.
"How peculiar that we have learned to fear the dancing pictures more than the factory conditions that drove my immigrant neighbors to twelve-hour days. We wring our hands over which nation controls the algorithm that distracts our young people, yet remain curiously silent about which forces control the wages, housing, and healthcare that determine whether they can build decent lives. Perhaps if we directed half this legislative energy toward ensuring every American had genuine security, we would worry less about which distant power might know they prefer cat videos to political discourse."
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People Involved
Adam Presser
CEO, TikTok USDS Joint Venture LLC (Leading new American entity)
Shou Zi Chew
CEO, TikTok (Global) (Remains global TikTok CEO; serves on USDS board)
Larry Ellison
Co-founder and CTO, Oracle (Key investor; Oracle holds 15% stake)
Zhang Yiming
Founder, ByteDance (Stepped down as CEO in 2021; maintains voting control)
Donald Trump
President of the United States (Brokered final deal structure)
J.D. Vance
Vice President of the United States (Defended deal structure)
Elizabeth Warren
U.S. Senator (D-MA) (Calling for investigation into deal)
Ed Markey
U.S. Senator (D-MA) (Questioning deal details)
Organizations Involved
TI
TikTok USDS Joint Venture LLC
Private Company
Status: Newly operational as of January 23, 2026
The American-controlled entity operating TikTok, CapCut, and Lemon8 in the United States under national security safeguards.
OR
Oracle
Technology Company
Status: Managing investor with 15% stake; security partner
The cloud computing company responsible for storing U.S. TikTok data and overseeing algorithm retraining.
BY
ByteDance Ltd.
Technology Company
Status: Retains 19.9% non-controlling stake
The Beijing-based parent company that built TikTok and now cedes U.S. operational control.
SI
Silver Lake
Private Equity Firm
Status: Managing investor with 15% stake
The technology-focused private equity firm with $103 billion in assets under management.
MG
MGX
Sovereign Investment Fund
Status: Managing investor with 15% stake
Abu Dhabi's $100 billion AI-focused investment vehicle backed by Mubadala.
Timeline
Warren Demands Investigation Into 'Billionaire Takeover'
Congressional
Senator Elizabeth Warren calls for investigation into whether Trump "struck another backdoor deal for this billionaire takeover," questioning influence of Oracle's Larry Ellison and other investors. Senator Ed Markey says deal leaves "many key questions unanswered."
TikTok USDS Joint Venture Operational
Business
New entity becomes fully operational. ByteDance loses access to U.S. user data. Oracle begins algorithm retraining on American data only.
National Security Experts Question Deal's Effectiveness
Analysis
PBS NewsHour segment features national security experts arguing the deal "falls short" of protecting Americans from Chinese influence. Critics note Beijing retains control over algorithm decisions about what content is emphasized or censored, despite Oracle's security role.
Washington Post: Deal 'Gave Away Too Much' to ByteDance
Analysis
Washington Post opinion piece argues the divestiture "gave away too much to China-owned ByteDance" by allowing ByteDance to maintain ownership of the algorithm and license it to the spinoff. Questions whether structure truly severs operational relationship as required by law.
Users Express Concerns About Algorithm Changes
Public Reaction
TikTok users voice concerns about algorithm retraining. Georgetown professor notes popularity reflects approval of current algorithm; changes could upset users. Some users worry new algorithm will push government propaganda or owners' agenda.
Deal Finalized, Presser Named CEO
Business
Joint venture closes. Adam Presser appointed CEO. Seven-member majority-American board includes representatives from Oracle, Silver Lake, MGX, and TikTok global.
Binding Agreements Signed
Business
ByteDance and TikTok execute binding agreements with Oracle-led consortium to form TikTok USDS Joint Venture LLC. Deal set to close January 22.
Trump Approves Deal Framework
Executive Action
Fourth deadline extension grants 120 days until January 23, 2026. Order names Oracle, Silver Lake, and MGX as managing investors with 45% combined stake.
Trump Delays Ban 75 Days
Executive Action
On Inauguration Day, Trump signs Executive Order 14166 postponing enforcement until April 5, directing negotiations with ByteDance.
TikTok Restored After 14 Hours
Business
Service resumes after Trump signals he will delay enforcement. Users see message crediting "President Trump's efforts" for restoration.
TikTok Goes Dark
Business
TikTok voluntarily suspends U.S. service hours before the ban takes effect. Users see: "A law banning TikTok has been enacted in the U.S." App removed from stores.
Supreme Court Upholds Ban Law
Legal
In unanimous per curiam decision, justices rule the law survives intermediate scrutiny. Congress's national security concerns are "well-supported."
Biden Signs Divest-or-Ban Law
Legislation
The Protecting Americans from Foreign Adversary Controlled Applications Act passes with bipartisan support, requiring ByteDance to sell by January 19, 2025 or face U.S. ban.
Chew Testifies Before Congress
Congressional
TikTok CEO Shou Zi Chew faces five hours of hostile questioning. Lawmakers dismiss Project Texas as a "marketing scheme." Analysts call the hearing a "disaster" for TikTok.
Project Texas Goes Live
Business
TikTok begins routing 100% of U.S. user data through Oracle's cloud infrastructure. Oracle starts reviewing TikTok source code in August.
Biden Revokes Trump TikTok Orders
Executive Action
President Biden rescinds Trump's TikTok and WeChat executive orders while directing Commerce to evaluate apps with foreign adversary ties.
Trump Signs First TikTok Ban Order
Executive Action
President Trump issues Executive Order 13942 directing Commerce to prohibit ByteDance transactions, citing national security. Federal judge blocks enforcement in September.
Discussed by: Industry analysts at eMarketer; technology publications including The Verge and Wired
Oracle successfully retrains TikTok's recommendation algorithm using only American user data, preserving the addictive content discovery that drove TikTok's rise. User engagement remains stable, advertisers maintain spending, and the new structure becomes a model for other foreign-owned platforms. This requires Oracle to replicate ByteDance's machine learning capabilities without access to the original training data or engineering team.
2
User Experience Degrades, Creators Migrate to Rivals
Discussed by: Social media analysts; creator economy researchers; platforms like Instagram Reels and YouTube Shorts
The retrained algorithm fails to match ByteDance's recommendation quality. Users notice a degraded "For You" feed. Top creators, already diversified across platforms, shift primary focus to Instagram Reels or YouTube Shorts. TikTok's U.S. user base shrinks 20-30% within 18 months. The $100 billion valuation proves inflated.
3
Critics Challenge ByteDance Ties, Demand Full Divestiture
Discussed by: Senator Elizabeth Warren; national security hawks in Congress; advocacy groups
Critics argue ByteDance's 19.9% stake and continued role in e-commerce and advertising mean insufficient separation from Beijing. Congressional investigations reveal ongoing data or technology sharing. New legislation requires complete divestiture or actual ban. The current deal proves a temporary solution.
4
New Structure Stabilizes, Becomes Foreign Investment Template
Discussed by: CFIUS practitioners; foreign investment attorneys; policy analysts at Brookings and CSIS
The joint venture operates without incident. Oracle audits find no security violations. The structure—majority American ownership, domestic data storage, algorithm transparency requirements—becomes a template for other Chinese-owned apps facing scrutiny. The TikTok precedent shapes U.S. policy toward foreign technology platforms for a decade.
Discussed by: Senator Elizabeth Warren, Senator Ed Markey, national security hawks
Congressional scrutiny reveals ByteDance's algorithm licensing arrangement violates the divest-or-ban law's prohibition on "operational relationship." New legislation or legal challenges force renegotiation. Warren's "billionaire takeover" framing gains traction, pressuring Trump administration to demand stricter separation. The current deal proves legally insufficient.
Historical Context
Murdoch's Fox Broadcast Waiver (1995)
1985-1995
What Happened
Rupert Murdoch, born Australian, became a U.S. citizen in 1985 to acquire Metromedia's TV stations. In 1995, the FCC investigated whether his News Corporation, 99% owned by an Australian entity, violated foreign ownership limits. The FCC found violations but granted a waiver, ruling Murdoch's ownership served "the public interest."
Outcome
Short Term
Fox kept its stations. The decision established that foreign ownership rules could be waived for perceived public benefit.
Long Term
Set precedent that citizenship and structural arrangements can satisfy foreign ownership concerns in media. Murdoch built Fox into a major broadcast network.
Why It's Relevant Today
Like TikTok, Fox faced scrutiny over whether corporate structures truly severed foreign control. The FCC's willingness to accept a structural fix rather than force divestiture offers a precedent—though TikTok's ties to China triggered far stricter requirements.
Sony's Columbia Pictures Acquisition (1989)
September-October 1989
What Happened
Sony paid $3.4 billion for Columbia Pictures, sparking anxieties about Japanese control of American cultural production. Newsweek ran covers about Japan "buying America." Congress held hearings questioning whether foreign ownership threatened cultural integrity. No regulatory action blocked the sale.
Outcome
Short Term
The deal closed. Initial fears of Japanese cultural influence on Hollywood proved unfounded.
Long Term
Sony took a $2.7 billion writeoff in 1994. Japanese ownership of entertainment assets became normalized. The episode showed that cultural anxiety often exceeds actual risk.
Why It's Relevant Today
Both cases involve foreign acquisition of platforms shaping American culture and information. The key difference: China's authoritarian government and laws requiring data access created national security concerns that Japan never triggered. The TikTok outcome shows how different adversarial contexts produce different regulatory responses.
Silver Lake's Skype Acquisition and Sale (2009-2011)
September 2009 - October 2011
What Happened
Silver Lake led a $1.9 billion acquisition of 65% of Skype from eBay, then sold to Microsoft for $8.5 billion two years later. The deal demonstrated how private equity could extract value from technology platforms through operational improvements and strategic positioning.
Outcome
Short Term
Silver Lake achieved a 4x return in two years. Microsoft gained video calling technology to compete with Apple's FaceTime.
Long Term
Skype's user base peaked at 300 million monthly users in 2016 before declining. Microsoft shut down Skype in May 2025, folding users into Teams.
Why It's Relevant Today
Silver Lake's Skype experience—buying a platform under regulatory and competitive pressure, then achieving a successful exit—informs its TikTok investment. The firm's Co-CEO Egon Durban, who led the Skype deal, now sits on TikTok's board.
