On December 18 local time, TikTok CEO Shou Zi Chew (周受资) issued an internal letter updating employees on the progress of TikTok’s U.S. operations.
The letter stated that ByteDance (字节跳动) and TikTok have signed agreements with three investors and will establish a new joint venture for TikTok’s U.S. business.
The new entity, to be named TikTok US Data Security Joint Venture LLC, will be responsible for data protection, algorithm security, content moderation, and software assurance in the United States. Other U.S.-based TikTok entities wholly owned by ByteDance will continue to oversee commercial activities such as e-commerce, advertising, and marketing operations, as well as TikTok’s global interoperability. According to the letter, the relevant agreements are expected to be completed no later than January 22, 2026.
Going forward, TikTok’s U.S. operations will mainly involve two entities. ByteDance TikTok U.S., wholly owned by ByteDance, will remain responsible for commercial activities including e-commerce, advertising, and global connectivity. The newly established TikTok US Data Security Joint Venture LLC will focus on U.S. data and content security as well as software assurance, in order to comply with U.S. legal requirements.
The internal letter also noted that the new joint venture will be responsible for algorithm security.
According to the disclosure, ByteDance will continue to own the intellectual property rights to TikTok’s algorithms and will license them to the joint venture, charging licensing fees. Commercial operations such as e-commerce, advertising, and marketing—which represent TikTok’s primary sources of revenue—will remain under ByteDance’s wholly owned U.S. entities. The data and content security functions handled by the joint venture will be non-profit in nature and involve high operating costs. To support its operations, commercially reasonable revenue-sharing arrangements will be established among the relevant entities.
In addition to the division of business responsibilities, the board composition and shareholding structure of TikTok US Data Security Joint Venture LLC remain consistent with previously disclosed arrangements.
The internal letter disclosed that ByteDance and TikTok have signed agreements with three investors: Oracle, Silver Lake, and MGX. These new investors will collectively hold 45% of the joint venture’s equity, while certain existing ByteDance investors and their affiliates will hold 30.1%. ByteDance will retain a 19.9% stake, remaining the largest single shareholder. The joint venture will be majority-owned by U.S. investors and governed by a newly formed seven-member board of directors.
Industry observers note that TikTok’s U.S. arrangement resembles Apple’s operating model in China through “Guizhou-Cloud,” although Apple does not hold equity in its local operating entity, Cloud on Guizhou Big Data Industry Development Co., Ltd. (云上贵州大数据产业发展有限公司). By contrast, ByteDance will retain a significant stake in the new U.S. joint venture.
The internal letter reiterated that the U.S.-related agreements are expected to be completed no later than January 22, 2026.