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TikTok establishes US-based entity to comply with regulations
TikTok has finalized an agreement allowing it to continue operations in the United States by transferring control to a majority-American board. The move follows regulatory pressure over national security concerns tied to its Chinese ownership.
New governance structure unveiled
The platform's US operations are now managed by TikTok USDS Joint Venture LLC, a newly formed entity backed primarily by American investors. The venture is governed by a seven-member board, which includes TikTok CEO Shou Zi Chew. ByteDance, TikTok's Chinese parent company, retains a 19.9% stake in the business.
Algorithm and data oversight shift to Oracle
Under the terms of the deal, TikTok's content recommendation algorithm-the core feature powering its For You feed-has been licensed to Oracle, a US-based tech firm led by Larry Ellison. Oracle, which previously handled TikTok's US user data under Project Texas, will now retrain and update the algorithm using American user data. TikTok stated that both the algorithm and user data will remain protected within Oracle's secure cloud infrastructure in the US.
User experience and advertiser concerns
Analysts warn that significant changes to TikTok's platform could alienate its 200 million US users and advertisers. Jasmine Enberg, co-CEO of Scalable, a media company focused on the creator economy, noted that while a new app download is unlikely, brands will seek assurances that their marketing strategies remain unaffected.
"Behind the scenes, TikTok is likely working hard to assure advertisers it will remain business as normal."
Jasmine Enberg, Co-CEO of Scalable
Experts suggest that algorithm adjustments could subtly alter content personalization, potentially leading to a different user experience. Dr. Kokil Jaidka of the National University of Singapore cautioned that while the app may not feel drastically different, weaker personalization or slower updates could emerge due to constraints in data access and integration with TikTok's global systems.
Updated terms of service for US users
TikTok updated its terms of service for American users on Thursday, requiring them to agree to a new contract with the US-based entity. Key changes include:
- Children under 13 are restricted to TikTok's Under 13 Experience.
- The new US entity disclaims endorsement of any content on the platform.
- Users must acknowledge risks associated with generative AI, including the potential for inaccurate, misleading, or unlawful content.
TikTok has not yet clarified what specific changes US users can expect in their app experience or when they will take effect. The company stated that the joint venture aims to maintain compatibility with other apps and regions, ensuring US creators remain discoverable globally.
Sister apps CapCut and Lemon8 also secure US operations
The future of ByteDance's other popular apps, CapCut and Lemon8, is now assured in the US under the same safeguards as TikTok. Both apps briefly went offline in January 2025 when a US ban temporarily took effect. TikTok confirmed that the joint venture's protections extend to its entire portfolio of apps and websites in the country.
