TikTok US Joint Venture Launch 2026: ByteDance Retains Algorithm Control
TikTok officially launches the TikTok USDS joint venture. ByteDance retains 19.9% ownership and algorithm control, mirroring Apple's iCloud strategy in China for the US market.
The algorithm stays, but the management shifts. TikTok has officially launched a US joint venture tasked with "safeguarding the American content ecosystem." While the structure mirrors Apple's 2018 iCloud deal in China, ByteDance has managed to keep a tighter grip on its intellectual property than many expected.
TikTok US Joint Venture Launch 2026: A Mirror of Apple’s China Strategy
According to the South China Morning Post (SCMP), the new entity, known as 'TikTok USDS', is being compared to Apple’s move to transfer mainland Chinese user data to Guizhou-Cloud Big Data (GCBD). However, there's a key distinction: Apple holds no stake in the Chinese entity, whereas ByteDance remains the largest single shareholder in its new US venture.
Inside the Ownership Structure and Governance
The ownership breakdown revealed on Friday shows ByteDance holding 19.9% of the joint venture. Strategic partners Oracle, Silver Lake, and MGX each hold 15%, with the remaining 30.1% controlled by affiliates of existing ByteDance investors. Reports indicate the Chinese government has approved the arrangement.
Beijing previously opposed a direct divestiture, revising the export control list to include technologies like TikTok’s recommendation algorithm.
Under this framework, the joint venture will "retrain" the content recommendation algorithm using US user data, utilizing technology licensed from ByteDance. This setup also extends protective measures to other ByteDance apps in the US, such as CapCut and Lemon8.
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