TikTok Completes U.S. Ownership Transfer to Joint Venture, Updates Terms and Algorithm
Updated (2 articles)
Joint venture finalizes U.S. control with majority American ownership Effective Jan. 22 2026, TikTok USDS Joint Venture LLC took over U.S. operations, giving Oracle, Silver Lake and MGX each a 15 % stake, while ByteDance retains 19.9 % and Michael Dell’s firm backs the remaining share, ensuring a majority American‑controlled entity [1][2].
User contracts shift to TikTok USDS with expanded content license American users now sign agreements with the joint‑venture rather than TikTok, keeping ownership of their posts but granting a worldwide, irrevocable, royalty‑free license for the platform to use, adapt and distribute content, including AI‑generated outputs, subject to user settings [1].
Algorithm licensed, retrained on U.S. data and stored in Oracle cloud The deal licenses TikTok’s recommendation engine to the U.S. owners, mandates retraining exclusively on U.S. user data, and requires the source code to reside in Oracle’s U.S. cloud environment to address security concerns; governance rests with a seven‑member board dominated by Americans [2].
Political endorsement and expert cautions signal mixed outlook Former President Donald Trump publicly praised the arrangement as a “save” for TikTok, while analysts warn that retraining the algorithm on domestic data could slow recommendations and alter the user experience for roughly 200 million Americans [2].
Sources (2 articles)
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[1]
Newsweek: TikTok finalizes U.S. ownership shift as USDS joint venture takes over and updates Terms of Service: Details the completion of the joint‑venture, ownership percentages, new user contracts, broad content licensing, AI output rules, advertising rights, and moderation processes .
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[2]
BBC: TikTok Secures U.S. Operations Through New Joint Venture: Highlights the formation of TikTok USDS LLC, algorithm licensing and U.S.-only retraining, board composition, Trump’s endorsement, and expert concerns about potential changes to app performance .
Timeline
Sep 2025 – The United States and China reach a framework agreement that sets the stage for transferring TikTok’s U.S. operations to an American‑controlled entity, ending years of diplomatic negotiations over data security concerns. [2]
Jan 22, 2026 – TikTok completes the shift of its U.S. business to the newly created TikTok USDS Joint Venture LLC, making the venture the contracting party for all American users and formally reducing ByteDance’s ownership to 19.9 %. [2]
Jan 23, 2026 (05:17 UTC) – TikTok announces the formation of TikTok USDS Joint Venture LLC, a separate U.S. company that licenses the recommendation algorithm and stores its code in Oracle’s U.S. cloud to address security worries. [1]
Jan 23, 2026 (05:17 UTC) – The joint‑venture ownership structure gives a majority American stake: Oracle (15 %), a consortium including Michael Dell’s family office and Vastmere Strategic Investments (35.1 %), with ByteDance holding 19.9 % and the remainder split among other investors. [1]
Jan 23, 2026 (05:17 UTC) – A seven‑member board, dominated by Americans and featuring CEO Adam Presser, TikTok global chief Shou Zi Chew, Oracle executives, and Susquehanna’s Mark Dooley, assumes governance of the venture. [1]
Jan 23, 2026 (05:17 UTC) – Former President Donald Trump posts on social media, “I’m so happy to have helped in saving TikTok,” publicly endorsing the deal that averts a potential ban. [1]
Jan 23, 2026 (05:17 UTC) – Industry analysts warn that retraining the algorithm on U.S.‑only data could make the app slower, lighter, and less effective at surfacing content, potentially altering the experience for roughly 200 million American users. [1]
Jan 23, 2026 (13:23 UTC) – TikTok updates its Terms of Service to reflect the new ownership, stating that U.S. users now contract with TikTok USDS Joint Venture LLC and confirming age‑restriction policies, including an “Under‑13 Experience.” [2]
Jan 23, 2026 (13:23 UTC) – The revised terms grant TikTok a worldwide, irrevocable, royalty‑free license to use, adapt, and distribute user‑generated content—including AI inputs and outputs—for platform operation and machine‑learning development, while users retain ownership of their content. [2]
Jan 23, 2026 (13:23 UTC) – New generative‑AI provisions require AI‑generated outputs to be provided “as is,” hold users responsible for inputs and outputs, and prohibit misrepresenting AI content as human‑created or removing watermarks. [2]
Jan 23, 2026 (13:23 UTC) – TikTok clarifies that it may personalize ads and content using user activity and third‑party data, and may use users’ names and profile images in sponsored material without compensation unless a separate agreement exists. [2]
Jan 23, 2026 (13:23 UTC) – The platform outlines expanded moderation powers, allowing it to remove or restrict content and suspend accounts, while offering an on‑platform appeals process for users who contest enforcement actions. [2]
External resources (2 links)
- https://www.tiktok.com/legal/page/us/terms-of-service/en (cited 1 times)