ByteDance, the China-based owner of TikTok, is set to maintain ownership of TikTok's U.S. business operations even as it cedes control of the app's U.S. user data, content, and algorithm to a newly formed joint venture. This larger-than-expected continued involvement of ByteDance follows President Donald Trump's executive order on Thursday, which mandated a sale of TikTok's U.S. operations to an investor consortium, including Oracle and Silver Lake, to meet national security requirements.
Dual-Company Structure and Ownership
The proposed structure, which remains under discussion and could still change, reportedly divides U.S. TikTok into two entities:
Joint Venture: This newly announced venture will manage the backend operations, handling U.S. user data and the algorithm. ByteDance is expected to be the single largest minority shareholder in this entity.
ByteDance-Owned Division: A separate division, to be wholly owned by ByteDance, will control revenue-generating business operations like e-commerce and advertising.
Vice President JD Vance stated the new U.S. company would be valued at approximately $14 billion.
Congressional Scrutiny
These ownership details have immediately raised questions in Congress regarding whether the deal represents a qualified divestiture of all of TikTok’s U.S. assets as required by the 2024 law. This law mandated ByteDance to divest its U.S. operations or face a ban.
Following the report, Republican John Moolenaar, chair of the House Select Committee on China, pledged to conduct full oversight. He emphasized that the deal should "preclude operational ties between the new entity and ByteDance," and that the law set firm guardrails prohibiting cooperation on the crucial recommendation algorithm.
Political Stakes
The fate of TikTok in the U.S. holds high political significance for President Trump. He frequently discusses the platform, which boasts 170 million U.S. users and where he has 15 million personal followers. Trump has credited TikTok with helping him reach young voters and securing his re-election last year. The White House also recently launched its own official TikTok account.