TikTok CEO Shou Zi Chew has issued an internal memo to update the progress of TikTok’s U.S. business operations. The memo states that ByteDance and TikTok have signed an agreement with three investors and will establish a new TikTok U.S. joint venture. This deal means that the majority stake in the U.S. version of TikTok will be held by American investors.
The new joint venture, named TikTok USDS Joint Venture LLC, will be responsible for data protection, algorithm security, content moderation, and software assurance in the United States. Other ByteDance - wholly - owned TikTok entities in the U.S. will continue to oversee commercial activities such as e - commerce, advertising, and marketing operations, as well as the global interoperability of the TikTok product. All matters related to the agreement are set to be finalized no later than January 22, 2026.
Going forward, TikTok’s U.S. operations will mainly involve two entities:
· ByteDance TikTok U.S., which is 100% owned by ByteDance, will handle commercial businesses including e - commerce and advertising, as well as global interoperability.
· TikTok USDS Joint Venture LLC (the one mentioned in the internal memo) will take charge of U.S. data and content security and software assurance to comply with U.S. legal requirements.
The new joint venture will be responsible for algorithm security. ByteDance will retain the intellectual property rights to TikTok’s algorithm, authorize the joint venture to use it, and charge the latter a licensing fee. Commercial activities like e - commerce, advertising, and marketing operations are TikTok’s main revenue streams and will still be managed by ByteDance - wholly - owned entities such as ByteDance TikTok U.S.. The data and content security - related businesses under the new joint venture are non - profit in nature and entail high operating costs. To ensure the joint venture’s operation, there will be a commercially reasonable revenue - sharing arrangement among the relevant entities.
In addition to the division of businesses between the two entities, the board seats and equity structure of TikTok USDS Joint Venture LLC remain consistent with the previously disclosed information.
Under the agreement, the U.S. version of the TikTok app will be controlled by the new joint venture. A 50% stake in the venture will be held by an investor consortium consisting of tech company Oracle, private equity firm Silver Lake, and UAE - backed investment company MGX. According to Chew’s memo, a little over 30% of the joint venture’s shares will be held by "affiliates of certain existing ByteDance investors", while ByteDance will retain a 19.9% stake. Notably, ByteDance will remain the single largest shareholder of the new joint venture. Furthermore, the joint venture will be majority - owned by American investors and governed by a new seven - member board of directors.
Back in September, the Trump administration announced that it had reached an agreement with China to transfer control of TikTok’s U.S. business to a consortium mainly composed of American investors. The President signed an executive order, stating that the agreement constitutes a qualified divestiture, and postponed the enforcement of the law that would ban or force the sale of TikTok by 120 days to allow time for the completion of the transaction.
In the memo, TikTok stated that this deal will enable "more than 170 million Americans to continue exploring a world of endless possibilities and be part of an important global community".
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