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TikTok’s US Operations Undergo Major Restructuring Amidst Intense Scrutiny
The landscape of TikTok’s American presence has been dramatically reshaped following a significant announcement earlier this week. The popular short-form video platform has officially spun off its US services into a distinct entity, TikTok USDS Joint Venture LLC. This move, intended to address long-standing national security concerns, places ByteDance, TikTok’s parent company, in a minority position, holding just a 19.9 percent stake in the new venture.
The Genesis of TikTok USDS Joint Venture LLC
The majority ownership of the newly formed TikTok USDS Joint Venture LLC now rests with a consortium of prominent American stakeholders. Tech giant Oracle, alongside investment powerhouses Silver Lake and MGX, holds the controlling interest. Notably, smaller investors, including the family investment firm of Michael Dell, also contribute to the new ownership structure.
Under this revamped arrangement, Oracle will assume a critical role, becoming the custodian of all US user data. Furthermore, the joint venture is tasked with the comprehensive retraining, testing, and updating of the content recommendation algorithm specifically for American users. Crucially, the new entity will also wield the ultimate decision-making authority for trust and safety policies, as well as content moderation practices within the United States.
A Deal Shrouded in Ambiguity
Despite the company’s press release detailing these structural changes, many fundamental questions that have lingered since the deal’s initial proposal remain conspicuously unanswered. Foremost among these is the intricate challenge of crafting a licensing agreement for TikTok’s core algorithm that effectively severs any relationship with ByteDance that could be deemed problematic under existing legislation.
Even key legislators who championed the original bill appear to be grappling in the dark. Representative John Moolenaar (R-MI), Chair of the House Select Committee on China, articulated these concerns, stating, “Does this deal ensure China does not have influence over the algorithm? Can the parties involved assure Americans their data is secure?” He emphasized that these critical inquiries demand resolution as his committee prepares to exercise oversight over the agreement.
Lawmakers Divided: From Skepticism to Outright Frustration
The announcement has triggered a varied, yet largely critical, response from Capitol Hill, underscoring the deep political divisions surrounding TikTok’s future.
Concerns for Creators and Calls for Transparency
Representative Ro Khanna (D-CA), Ranking Member of the Select Committee and one of the few lawmakers who opposed the initial divest-or-ban legislation, expressed apprehension regarding the deal’s immediate impact. He noted that the agreement “is once again causing uncertainty among many creators.” Khanna pledged to engage directly with individuals whose livelihoods are intricately tied to the app, seeking a viable path forward that prioritizes data security without disrupting the rapidly expanding creator economy.
Meanwhile, Senator Ed Markey (D-MA), who initially voted for the foreign aid package containing the divest-or-ban provision, voiced profound dissatisfaction. Despite his previous efforts to extend deadlines and even propose rescinding the ban legally, Markey now asserts that “this TikTok deal raises many more questions than answers.” He lambasted the White House for its “virtually no details about this agreement, including whether TikTok’s algorithm is truly free of Chinese influence,” despite repeated requests for information. Markey concluded with a scathing critique: “This lack of transparency reeks.”
Political Fallout and Allegations of Influence
The political dimensions of the deal are further complicated by the perceived role of former President Donald Trump in the negotiations. Trump reportedly discussed the TikTok deal directly with Chinese President Xi Jinping and even publicly bantered with Oracle chairman Larry Ellison about negotiating in front of the media. This context fuels frustration among some Democrats, particularly given that close Trump allies, such as Ellison, stand to benefit significantly from the arrangement.
Representative Frank Pallone (D-NJ), Ranking Member of the Energy and Commerce Committee and a supporter of the initial ban bill, did not mince words. He took to X (formerly Twitter) to declare, “This ‘deal’ helps Trump’s rich friends get richer in exchange for turning TikTok into a propaganda machine for the White House.” Pallone criticized the “sparse information provided,” arguing it fails to address serious concerns about legal compliance or the fundamental national security threat posed by Beijing’s continued potential control over the platform.
The Path Forward: Demands for Accountability
As the dust settles on this significant corporate restructuring, a clear consensus emerges from many corners of Congress: the current deal leaves too much to speculation and demands rigorous scrutiny. The call for greater transparency from the White House, TikTok, and the new joint venture is unified and forceful. Congress now faces the formidable responsibility of investigating this complex arrangement, demanding comprehensive details, and ultimately ensuring that any resolution genuinely safeguards national security interests while allowing TikTok to continue its operations in the United States. The journey to a truly secure and transparent TikTok for American users appears far from over.