On Thursday, ByteDance announced what everyone had spent six years insisting was impossible: a deal that satisfies both Chinese export controls and American national security demands. TikTok US will become a joint venture, majority-owned by American investors. ByteDance will retain 19.9% and—crucially—the recommendation algorithm that makes TikTok TikTok. It is a masterwork of structured ambiguity, a deal that lets everyone claim victory while changing almost nothing.
The Deal
The new TikTok USDS (US Data Security) entity will be owned by a consortium of investors: Oracle, Silver Lake, and Abu Dhabi's MGX each hold 15%, with the Dell Family Office and other investors making up the rest. ByteDance retains 19.9%—just under the 20% threshold that would trigger additional regulatory scrutiny.
Oracle, which has been circling this deal since 2020, will serve as the "trusted technology partner," handling data security and algorithm oversight. The arrangement mirrors Project Texas, TikTok's years-long effort to route US user data through Oracle's cloud infrastructure. That project cost TikTok over $1.5 billion and was never enough to satisfy regulators. Now it's the foundation of the entire deal.
The algorithm—the recommendation engine that makes TikTok's For You page uncannily effective—remains ByteDance intellectual property. China's 2020 export control update specifically added "personalized content recommendation" to the restricted list, blocking any transfer. The deal works around this by keeping the algorithm Chinese while wrapping American oversight around its deployment.
Six Years of Theater
The path to this deal reads like a political farce. In August 2020, Donald Trump issued an executive order forcing ByteDance to sell TikTok's US operations within 90 days, citing national security. The order was blocked by courts. Trump left office. The drama appeared over.
It wasn't. In April 2024, a bipartisan Congress passed legislation requiring ByteDance to divest TikTok or face a ban. President Biden signed it into law. Unlike Trump's executive orders, this had teeth—statutory authority that courts would have to respect.
TikTok sued, arguing First Amendment violations. The company lost at the appeals court level in December 2024. In January 2025, the Supreme Court heard oral arguments and signaled a 9-0 ruling against TikTok. Even liberal justices found the national security argument compelling.
The ban was set to take effect January 19, 2025. TikTok prepared to go dark. And then Donald Trump—the man who started this entire saga—signed an executive order pausing enforcement for 75 days.
The irony was lost on no one. Trump had campaigned on banning TikTok, tried to ban TikTok, failed to ban TikTok, watched his successor nearly succeed in banning TikTok, and then saved TikTok at the last moment. His reasoning was characteristically transactional: TikTok had become a campaign tool, its young users a potential constituency.
The Negotiations
What followed was a year of extensions, deadlines, and leaked deal terms. The core problem never changed: China wouldn't let ByteDance sell the algorithm, and America wouldn't accept a deal without control over the algorithm.
The solution was structural creativity. The algorithm would stay Chinese, but its American deployment would be overseen by Oracle engineers with security clearances. User data would remain in Oracle's US cloud, as it had been under Project Texas. A new oversight board would review algorithmic decisions affecting American users.
In practical terms, this means TikTok US will run on Chinese-developed code, executed on American servers, monitored by American contractors, owned by a multinational consortium, and regulated by both governments. It's not so much a clean break as an elaborate custody arrangement.
What Changed
The honest answer: not much.
TikTok's recommendation algorithm will continue to be developed in Beijing. American users' viewing habits will continue to train that algorithm. The app's fundamental architecture—the thing that makes it a potential intelligence tool—remains intact.
What changes is the wrapper. Oracle gains visibility into data flows. The US government gains a legal framework for oversight. ByteDance gains continued access to its most valuable market. American investors gain equity in one of the world's most engaging apps.
The national security concerns that animated six years of regulatory action haven't been addressed so much as proceduralized. If the Chinese government wanted to use TikTok to influence American users—through subtle algorithmic adjustments, through content promotion, through data collection—this deal makes that marginally more difficult and dramatically more documented.
That may be enough. Intelligence professionals have long noted that the TikTok threat is more theoretical than demonstrated. No smoking gun has ever surfaced showing Chinese government manipulation of American TikTok feeds. The concern was always about capability, not evidence—the possibility that Beijing could weaponize TikTok, not proof that it had.
The Algorithm Question
The deal's most significant concession is also its least discussed: the algorithm stays Chinese.
TikTok's recommendation engine is arguably the most sophisticated content-matching system ever built. It learns user preferences with unsettling speed, serving videos that feel personally curated within hours of first use. This isn't just technically impressive—it's designed to be addictive, optimized for engagement metrics that keep users scrolling.
In 2020, China added this technology to its export control list, explicitly blocking transfers of "personalized content recommendation based on data analysis." The timing was not coincidental—it came as the first Trump administration was demanding an algorithm sale.
The message was clear: whatever else might be negotiable, China considers TikTok's recommendation technology a strategic asset. The deal that finally emerged accepts this reality. ByteDance keeps the algorithm. Oracle monitors its deployment. America gets transparency into a black box that remains Chinese property.
This is either a reasonable compromise or a fundamental capitulation, depending on your threat model. If you believe the algorithm itself is the weapon—capable of subtly shaping what 170 million Americans see and think—then American oversight of a Chinese-controlled system is inadequate. If you believe the data is the primary concern, Oracle's involvement addresses the risk.
The Winners
ByteDance keeps TikTok's American revenue stream, estimated at $20 billion annually. It retains the algorithm. It maintains 19.9% ownership. The company that was supposed to be forced into a fire sale instead negotiated a partnership.
Oracle finally lands the deal Larry Ellison has chased since 2020. The company gains a high-profile role as TikTok's security guarantor, plus likely contracts worth billions for cloud infrastructure and monitoring services.
Trump gets to claim he both threatened to ban TikTok and saved it—dealmaker optics without dealmaker risk. His campaign benefits from TikTok's young user base, which now owes its continued access to his intervention.
American TikTok users get to keep using the app. After years of ban threats, this is not nothing.
The Losers
National security hawks who wanted a clean break from Chinese tech face a hybrid arrangement that satisfies no purist position. The app they consider a propaganda vector remains operational, its core technology still Chinese.
American tech competitors who hoped a TikTok ban might cripple their most dangerous rival get no such gift. Instagram Reels and YouTube Shorts will continue competing against the industry's most sophisticated engagement engine.
The principle of divestiture itself takes a hit. The law required ByteDance to sell. The deal that emerged is a joint venture where ByteDance retains nearly 20% and full control of the underlying technology. If this satisfies the statute, the statute meant less than it appeared to.
What Happens Next
TikTok CEO Shou Zi Chew hailed the deal as securing TikTok's "long-term future in the US market." The company's internal memo reportedly describes the arrangement as "groundbreaking" for US-China tech relations.
Regulators will now scrutinize the implementation. CFIUS must approve the ownership transfer. Oracle's monitoring capabilities will be tested. The oversight board must be constituted. Any of these steps could generate new controversies.
And the fundamental tension remains. TikTok is a Chinese app, running Chinese code, developed by Chinese engineers, overseen by Chinese management. It now has American shareholders, American data centers, and American monitors. Whether this hybrid satisfies American security interests—or merely creates the appearance of doing so—will be debated for years.
Six years ago, Donald Trump stood in the Rose Garden and declared TikTok a national security threat that must be banned or sold. Today, a deal blessed by both governments allows TikTok to continue largely as before, with Oracle providing security theater and American investors providing the appearance of control.
Everyone got something. ByteDance kept its algorithm. Oracle got its contract. Trump got his deal. American users kept their app. The national security establishment got oversight mechanisms that may or may not matter.
What no one got was clarity. Is TikTok safe? Is it controlled? Has the threat been addressed or merely managed? The deal's genius—and its fundamental weakness—is that it allows each side to answer these questions however they prefer.
That's not resolution. It's détente. And détente, in tech as in geopolitics, is often the best available outcome.