TikTok Secures US Deal But China Tensions Linger Over Algorithm

TikTok has finalized a deal to spin off its US operations, temporarily averting a nationwide ban, but unresolved questions over control of its core algorithm could continue to strain US-China relations, analysts say.

ByteDance agreed to place its US business into a new joint venture controlled by American investors, according to the company.

The new entity, TikTok USDS Joint Venture LLC, will oversee US data security, content moderation, and algorithm protection.

TikTok signs agreement to create new U.S. joint venture, memo says https://t.co/DDGlMJG7zm

— CNBC (@CNBC) December 18, 2025

TikTok CEO Shou Zi Chew said the platform’s recommendation system will be retrained using US user data, with Oracle serving as the security auditor.

The agreement follows months of negotiations after Congress mandated a sale or ban. President Donald Trump has repeatedly extended the deadline, most recently to January 2026.

Despite the deal, experts warn compliance challenges remain. Any deeper separation of TikTok’s algorithm could trigger Chinese regulatory approval, which is not guaranteed. Beijing has not formally endorsed the transaction, and recent US arms sales to Taiwan could complicate approval.

Analysts say the deal limits immediate risk but does not resolve broader economic or strategic disputes between Washington and Beijing.

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