TikTok has finalised a deal to create a new U.S.-based joint venture aimed at preventing a nationwide ban of the app, according to reporting published on Thursday. The agreement restructures ownership of TikTok’s U.S. operations to comply with legislation requiring a reduction in Chinese control.
The move affects TikTok’s roughly 170 million users in the United States, whose access to the platform had been at risk under a law passed last year targeting foreign-owned social media platforms on national security grounds.
Deal Finalised as Ownership Is Reworked
Under the agreement, TikTok’s U.S. business will be transferred into a newly created joint venture that will be majority-owned and controlled by U.S. investors. Chinese shareholders, including TikTok’s parent company ByteDance, will retain a minority stake below 20%, in line with the ownership threshold set out in U.S. legislation.
Reuters reported that the deal has been finalised, marking a decisive step to comply with the law’s requirements before enforcement deadlines come into effect.
A TikTok spokesperson said the company had “reached an agreement that addresses U.S. concerns while allowing the platform to continue serving its American community,” according to published statements.
Why the Deal Was Required
The restructuring follows the passage of U.S. legislation in 2024 that ordered TikTok to divest from Chinese ownership or face removal from the U.S. market. Lawmakers cited concerns that Chinese ownership could expose American user data to foreign government access or influence content moderation decisions.
The law requires that ownership, governance, and operational control be placed outside the influence of what it defines as “foreign adversaries.”
Data and Governance Commitments
As part of the joint venture, TikTok’s U.S. user data will continue to be stored domestically, with oversight mechanisms designed to limit access by non-U.S. entities. Control of business operations, board governance, and compliance functions will sit with the U.S.-controlled company.
The structure is intended to demonstrate that ByteDance no longer exercises decisive influence over TikTok’s U.S. platform, particularly in areas related to data handling and operational decision-making.
Impact on Users and Businesses
The agreement removes immediate uncertainty for TikTok’s U.S. user base of approximately 170 million people, as well as creators, advertisers, and businesses that depend on the platform for distribution and revenue.
A ban would have forced app stores and service providers to block access to TikTok in the United States, disrupting a large segment of the digital creator economy.
Broader Implications for Global Tech Firms
TikTok’s joint venture agreement reflects a growing trend in which governments require foreign-owned technology platforms to restructure ownership and governance to maintain market access. Similar pressures have been applied globally in sectors involving data-intensive services and digital infrastructure.
The deal is likely to be closely watched by other multinational tech firms operating across politically sensitive jurisdictions.
What Happens Next
With the deal finalised, attention now turns to implementation and compliance verification under U.S. law. While the ownership structure aligns with statutory thresholds, enforcement authorities will assess whether the governance and data protections meet the law’s requirements.
For now, the agreement clears TikTok’s most immediate legal hurdle and keeps the platform operational in one of its largest markets.
