At a Glance
- TikTok has created a new U.S. entity, TikTok USDS Joint Venture LLC, to run its American operations.
- The new structure gives 80% of the U.S. business to non-Chinese investors, while ByteDance keeps a 19.9% stake.
- Key U.S. investors include Oracle, Silver Lake, and MGX, each holding a 15% share.
- Why it matters: The move satisfies U.S. lawmakers’ demand for separation from a Chinese parent and aims to protect user data.
TikTok announced the creation of a distinct American entity to manage its U.S. operations, a change that follows a 2024 law requiring the split from its Chinese parent, ByteDance. The new structure was designed to address long-standing concerns about data privacy and foreign control.
New U.S. Structure
The newly formed entity, TikTok USDS Joint Venture LLC, licenses TikTok’s recommendation algorithm from ByteDance but independently handles content moderation, data protection, algorithm security, and software controls. About 80% of the U.S. business is owned by non-Chinese investors, with ByteDance holding only 19.9%.
Investor Breakdown
| Investor | Stake | Role |
|---|---|---|
| Oracle | 15% | Security partner; audits compliance, manages data storage, oversees algorithm updates |
| Silver Lake | 15% | Financial and strategic support; capital and expertise to shape the platform |
| MGX | 15% | AI-focused investment; influence over AI direction and infrastructure |
| Total U.S. Investors | 45% | Collective ownership of the U.S. business |
The remaining 55% is split between ByteDance’s 19.9% share and other investors listed below.
Key Investor Profiles
Oracle
Oracle, a leading cloud computing and database firm, has long collaborated with top companies, including OpenAI, and already provides cloud infrastructure for TikTok’s U.S. user data. Under the new deal, Oracle serves as the security partner, auditing TikTok’s compliance with U.S. security requirements, managing data storage, and overseeing updates to the content recommendation algorithm.
MGX
MGX is an AI-focused investment firm based in the United Arab Emirates, created by Mubadala and G42. It invests in semiconductors and data centers. MGX’s stake could give it influence over key decisions shaping TikTok’s AI direction. The firm already backs xAI, Anthropic, and OpenAI, and contributed to a $100 billion AI data center initiative announced by President Trump, in which Oracle also participates.
Silver Lake
Silver Lake, a leading U.S. private equity firm, has invested heavily in technology companies such as Airbnb, Twitter, Dell Technologies, Tesla, and Waymo. Its role in U.S. TikTok is primarily financial and strategic, offering capital and expertise to help shape the platform’s direction. Silver Lake has collaborated with MGX in the past, including during the acquisition of a majority stake in Altera last year, and has invested in G42 since 2021.
Other Investors
Beyond the three primary stakeholders, several other investors hold smaller stakes in the U.S. entity:
| Investor | Affiliation |
|---|---|
| Dell Family Office | Michael Dell’s investment firm |
| Vastmere Strategic Investments | Affiliate of Susquehanna International Group (SIG) |
| Alpha Wave Partners | Global investment firm involved with SpaceX and Klarna |
| Virgo LI | Investment arm of Israeli tech investor Yuri Milner |
| NJJ Capital | Family office of Xavier Niel, founder of Iliad |
| Revolution | Venture capital firm founded by AOL co-founder Steve Case |
| Merritt Way | Managed by partners of Dragoneer Investment Group |
| Via Nova | Affiliate of General Atlantic |
Legislative Context
In 2024, Congress passed a law mandating that TikTok’s U.S. operations be separated from ByteDance. The new structure satisfies that requirement by giving majority ownership to U.S. investors and establishing independent oversight of data and content. The move follows years of pressure from lawmakers who feared the Chinese government’s potential access to American user data.
Impact on Users
The separation is expected to:
- Strengthen data protection by limiting foreign access.
- Provide clearer compliance with U.S. security standards.
- Maintain TikTok’s recommendation engine while ensuring it is licensed rather than controlled.
While the algorithm remains the same, the licensing arrangement means that U.S. operations are governed by a different legal and regulatory framework.
Key Takeaways
- TikTok now operates in the U.S. through a joint venture that is 80% U.S. owned.
- Oracle, Silver Lake, and MGX each hold 15%, totaling 45% of the U.S. business.
- ByteDance’s share is reduced to 19.9%.
- The new structure meets the 2024 law’s requirement for separation from the Chinese parent.
- The change aims to address data privacy concerns while keeping the popular recommendation algorithm in place.
About the Author
Jordan M. Lewis covers media, streaming, apps and platforms at News Of Philadelphia.
