ByteDance Signs US TikTok Deal, Splitting Operations Amid Security Concerns
January 23, 2026
TikTok, used by one in seven people worldwide, has faced challenges due to US security concerns. President Trump first tried to remove the app over fears that user data of 200 million Americans could be accessed by China. To ease worries, ByteDance created Project Texas to store US data on servers controlled by Oracle, a US company. Despite this, a 2024 US law pushed ByteDance to change TikTok's US ownership.
Now, ByteDance has agreed to split TikTok’s US operations from its global business. A new US consortium, including Oracle, will run TikTok in America. ByteDance will keep owning 19.9% but lose control of the US data and algorithm, licensing the technology to the US entity. The Trump administration valued this deal at $14 billion.
Experts say the TikTok experience in America will change. Kelsey Chickering from Forrester said, "TikTok's power lies in its content graph - an algorithm that learns from thousands of user signals to deliver hyper‑relevant, highly addictive videos." But with a US-only algorithm, the content flow and user experience will differ.
Advertisers and creators may see less reach because global viral hits could lose US traction. TikTok’s US revenue, estimated around $10 billion, might drop. The deal also adds complexity and cost for ByteDance with separate algorithms and teams.
ByteDance faced a major hurdle earlier when India banned TikTok in 2020, cutting off 200 million users. While India’s ban was broader against Chinese apps, TikTok remains unmatched by local rivals there. Unlike Huawei, which lost Western markets entirely, TikTok stays in America but with limits.
On the positive side, ByteDance fully controls Douyin, TikTok’s Chinese cousin app, which is profitable and innovative within China. ByteDance is also investing in areas like AI and cloud technologies to grow beyond ads.
Author Chris Stokel-Walker says the real issue is about control of culture and influence in the US, not just data security. "ByteDance will continue to run TikTok in the US, but with distinct limitations," he noted. This model may set a trend for how Chinese firms work globally amid rising mistrust.
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Tags:
Tiktok
Bytedance
Us-china relations
Technology deal
Social media
Data security
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