According to GSMArena, TikTok’s U.S. business will operate through a newly established U.S.-based entity. Under this arrangement, U.S. investors hold a controlling stake, ByteDance’s ownership is reduced to below 20 percent, and strategic decision-making is shifted away from China. Oracle plays a key role in hosting user data and managing the platform’s cloud infrastructure.
This structure is specifically designed to ensure TikTok is no longer classified under U.S. law as an application controlled by a foreign adversary.
Why TikTok Was Targeted
U.S. officials have long argued that TikTok poses potential risks beyond entertainment. Concerns focused on the possibility of Chinese government access to U.S. user data, the influence of TikTok’s recommendation algorithm on public opinion, and the lack of transparency around content moderation and data governance.
User Data and Algorithm Oversight
Under the finalized agreement, data from U.S. users will be stored exclusively on servers located in the United States and managed by U.S.-based companies. TikTok’s recommendation algorithm for the U.S. market will operate under independent oversight, although it remains unclear whether the core algorithm has been fully separated from ByteDance.
Impact on Users and the Market
For U.S. users, the agreement ensures that TikTok will remain available without interruption. Content creators, advertisers, and brands can continue their activities, and TikTok’s multi-billion-dollar advertising ecosystem in the U.S. remains intact.
On a broader scale, the deal sets a precedent for how governments may pressure foreign technology platforms to restructure ownership in exchange for continued market access.
