TikTok US Deal: Oracle JV, Algorithm Control & Future
TikTok US joint venture with Oracle explained. ByteDance retains 19.9%, investors hold 80.1%. Who controls the algorithm? Deal details, ownership & impact.
Recommendation Algorithm, TikTok: Ownership, Power, and Future.
The recommendation engine of TikTok, its enormously popular short-video feed, is an addictive algorithm, which has been the target of a technocracy scuffle of high stakes between China and the US. In December 2025, Oracle and other investors partnered with ByteDance to sign binding agreements to establish a joint venture with ByteDance in the United States.
This new company will operate the U.S. activities of TikTok and store the user data of the U.S., which should help to prevent a ban in the U.S. However, there are still questions regarding the true owners of the TikTok crown jewel algorithm. Even the U.S. arm is said to maintain the core business, and even a 19.9 per cent interest by ByteDance.
While the investors hold 80.1%. U.S. data, content, and algorithm backend services will be under the control of the joint venture based on the agreement.
The independent entity of the company, ByteDance, will deal with the revenue-generating sections such as e-commerce and advertisements.
The Algorithm Control: Uncertain Ownership.
According to analysts, the future of TikTok is vital as its popularity around the world is determined by its algorithm. According to Rush Doshi, a former Biden security official, it remains unclear whether China transferred, licensed, and continues to control the U.S. algorithm, and whether Oracle is just watching its usage.
Chew, the CEO of TikTok, informed the employees that the U.S. JV would have jurisdiction over U.S. data protection, algorithm security, content moderation, and software assurance, and in effect secluded U.S. operations.
Nevertheless, Chew also responded that product interoperability and business operations in the U.S. under the control of ByteDance will be handled separately on a global basis.
Practically, according to the Reuters sources, the algorithm will be in the control of the JV, although the ownership of the wider U.S. business will be left to ByteDance.
The arrangement resembles a previous report by Reuters: ByteDance agreed to transfer the data, the content, and the algorithm of the app to the JV in September 2025.
The JV will be charged with the responsibility of managing U.S. user data and the recommendation engine.
The entity that ByteDance owns, in turn, gathers ad and commerce revenues, whereas the JV gets a share in the technology services.
However, the laws of China make the situation more complicated: the laws were amended by Beijing to grant any export of source code or even recommendation algorithms.
The Chinese authorities have long been strongly hesitant to export the algorithm of TikTok.
Beijing has not officially supported the new deal, and this is an indication that its ultimate approval can be based on its position.
Deal Facts: Oracle, Investors, and Governance.
Important facts of the U.S joint venture have come out. Eighty per cent (80.1) of the new TikTok U.S. company will be owned by American and international investors, including cloud giant Oracle, private equity Silver Lake, Abu Dhabi-based Mubadala (MGX), and the remaining 19.9% will be retained by ByteDance.
In a statement made by the U.S., TikTok U.S. is valued at approximately 14 billion dollars in the deal. Oracle will perform more than just the funds: it will become a so-called trusted security partner, which will involve auditing the JV and guaranteeing the protection of the U.S. user data in its U.S. cloud.
This is to quell the U.S. security concerns by retaining the data within U.S. control. Even one of the seven board seats is occupied by ByteDance, with the majority of posts being occupied by Americans. This is a very similar arrangement to those announced in September.
At the time, ByteDance signed to spin off a third Chinese-owned subsidiary that specialised in ad and e-commerce (owned wholesale by ByteDance) and the JV in technology. According to TikTok, the JV will be independent of data and algorithm security. The news increased the share price at Oracle as it was an indication that investors had approved the new role of Oracle. The transaction will be complete by January 2026 and will terminate years of. The agitation by Washington towards TikTok divestment.
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JAHID
’m a passionate Social Media Marketing professional who loves building brand presence online. I specialize in creating engaging content, managing campaigns, and analyzing performance to drive audience growth and brand awareness.
Currently, I’m working at Shakuniya Solutions Pvt. Ltd., where I’m learning and applying strategies to help clients achieve real results through social media. I believe in creativity, consistency, and data-driven marketing.
