TikTok has reached agreements on the structure of a new US-based joint venture, setting the stage for the separation of its American operations from Chinese ownership, with closing expected in 2026. The move represents the most concrete step yet in resolving years of regulatory pressure and national security concerns surrounding the popular short-video platform.
According to reports cited by Yahoo Finance, the deal will see TikTok’s US operations transferred into a newly created joint venture controlled by a consortium of American investors, while China-based ByteDance will retain a minority, non-controlling stake. The arrangement is designed to comply with US legislation that requires TikTok to divest its US business or face a nationwide ban over concerns about data security and foreign influence.
The joint venture is expected to include participation from major US institutional investors already exposed to ByteDance, alongside new strategic partners with experience in technology, media, and data governance. While the identities of all investors have not been formally disclosed, sources familiar with the negotiations say the ownership structure will ensure that US entities hold decisive voting power and board control.
Under the proposed framework, TikTok US will operate as a standalone company with its own governance, compliance systems, and data infrastructure. User data generated in the United States is expected to be stored and managed domestically, with strict controls limiting any access by ByteDance or entities based outside the country. This approach builds on earlier initiatives such as Project Texas, which aimed to ring-fence US user data but failed to fully satisfy regulators.
The closing of the transaction is targeted for 2026, reflecting the complexity of regulatory approvals, valuation negotiations, and operational separation. The deal must still be approved by US authorities, including the Committee on Foreign Investment in the United States (CFIUS), which has long scrutinized TikTok’s ownership structure. Any material involvement by Chinese entities will also require clearance under China’s outbound investment and data security rules, adding another layer of uncertainty.
For TikTok, the agreement offers a path to preserving access to its more than 150 million US users, a market that accounts for a significant share of its global advertising revenue. The platform has become a central player in the creator economy, digital advertising, and music promotion, making a forced exit from the US both financially and strategically damaging.
From a broader industry perspective, the deal could set a precedent for how global technology companies navigate rising geopolitical fragmentation. Governments are increasingly demanding local control over data, algorithms, and governance, particularly for platforms with large social and political influence. TikTok’s joint venture model may become a template for other foreign-owned tech firms operating in sensitive markets.
However, risks remain. Critics argue that any continued ByteDance ownership, even at a minority level, could undermine the spirit of the divestment. Others warn that prolonged uncertainty could affect advertiser confidence, creator engagement, and long-term investment in the platform.
Still, reaching agreement on a joint venture marks a turning point. After years of stalled negotiations, legal battles, and political brinkmanship, TikTok now appears closer to securing its future in the United States, albeit under a radically reshaped ownership and governance structure.
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