One in seven people in the world use TikTok. Yet for the company behind such a cultural phenomenon, the last few years have been a rollercoaster.
TikTok’s challenges in the United States date back more than five years, when President Trump first signed an executive order to remove the app from American app stores over fears that the Chinese government could access the data of 200 million U.S. users and potentially influence content feeds.
To address these concerns, TikTok’s parent company, ByteDance, launched Project Texas, moving U.S. user data to domestic servers managed by Oracle and relocating parts of its headquarters to Singapore and Los Angeles. These steps were intended to demonstrate independence from China and reassure regulators. Despite these efforts, in 2024 Congress passed legislation threatening a U.S. ban unless ByteDance transferred majority ownership and adjusted TikTok’s operations.
The company has now completed a deal to separate the U.S. app from its global business under a new consortium including Oracle. ByteDance retains a 19.9% stake, below the 20% threshold required by law, but loses control over the algorithm and U.S. user data. The new U.S. entity will license TikTok’s algorithm from ByteDance, in a deal valued at $14 billion by the Trump administration.
“Kelsey Chickering, principal analyst at Forrester, noted that TikTok’s power lies in its content graph, which learns from thousands of user signals to deliver highly engaging videos. With a U.S.-only algorithm retrained on domestic data, the platform experience will change, and American TikTok is unlikely to behave the same as the global app,” she said.
The shift may affect creators and advertisers. Content that previously went viral across regions may now remain isolated to the U.S., potentially reducing engagement and prompting brands to adjust marketing strategies. U.S. advertising currently generates around $10 billion of TikTok’s estimated $20–26 billion global revenue.
ByteDance’s split mirrors other geopolitical tech tensions. In 2020, India banned TikTok along with 200 other Chinese apps, removing 200 million users from ByteDance’s portfolio. Unlike Huawei, which has been largely blocked from Western markets, TikTok is allowed to operate in the U.S., though under tightly controlled rules. Experts suggest the licensing model may become a blueprint for other Chinese companies seeking to expand globally amid regulatory scrutiny.
While TikTok faces constraints in the U.S., its Chinese counterpart, Douyin, remains under ByteDance’s full control, enabling innovation and profitability within China. The company is also investing in cloud services, data centers, and artificial intelligence, signaling efforts to diversify beyond its consumer-focused app business.
Analysts say TikTok’s U.S. situation reflects broader debates over control of culture, speech, and influence, rather than purely data security. ByteDance can continue operating the platform, but the deal marks a new reality for Chinese tech firms navigating global expansion amid rising geopolitical mistrust.
