TikTok signs agreement to form joint venture; unclear who will control the algorithm.

 TikTok has signed a joint venture agreement with Oracle and other investors to circumvent a US ban due to security concerns. The deal is expected to be finalized by January 22, 2026, but it remains unclear who will hold the proprietary rights to the app's core algorithm.
 

TikTok has signed an agreement to establish a legally recognized joint venture led by a group of US investors who will gain primary control of the app. This marks the end of a long battle in which the US has pressured ByteDance, TikTok's Chinese parent company, to either sell its operations or face a US ban.

Under the proposed structure, the new investors include Oracle, US-based Silver Lake, and MGX, an Abu Dhabi investment firm. The United Arab Emirates (UAE) will hold approximately 15% of the shares, totaling 50%, while ByteDance's existing investors will hold 30.1%, and ByteDance itself will hold 19.9%. The joint venture, named TikTok USDS Joint Venture LLC, will be overseen by a new seven-member board of directors, mostly American citizens. The deal is expected to be finalized no later than January 22, 2026.

Under the memorandum of understanding, TikTok user data in the U.S. will be stored on infrastructure managed by Oracle, ensuring user engagement and preventing any alterations. Advertisements will continue to reach other users without interference.

TikTok's video recommendation algorithm will be retrained using U.S. user data to ensure the content feed remains unaffected by external interference. U.S.-based authorities will be responsible for content review and policy enforcement within the country.

However, the memorandum of understanding does not explicitly state whether the algorithm will be “transferred ownership” or “licensed.” It remains unclear whether ByteDance will retain ownership of the algorithm's core intellectual property, given the Chinese government's reluctance to allow the sale of such technology. Currently, ByteDance and TikTok are in a state of scrutiny. The exact details of ownership of the algorithm have not yet been clarified.