TikTok Sold for $14B: China Still Controls the Algorithm

My verdict is clear: what was sold as "the biggest national security operation in social media" is actually one of the most skillful corporate maneuvers I've seen in two decades covering enterprise technology. ByteDance just turned an existential threat into a brilliant business.

On January 22, 2026, TikTok formalized the creation of TikTok USDS Joint Venture LLC, a new "American" entity that now operates TikTok's services for over 200 million users in the United States. Oracle leads a consortium that paid $14 billion for 80.1% of the company. But the fine print tells a very different story.

Let me break this down without sugarcoating it: this deal raises more questions than it answers.

Anatomy of the Deal: Who Pays, Who Rules

The buying consortium is made up of names that surprise no one following US tech policy:

Among the "other investors" are Michael Dell's family office and Susquehanna International Group, which was already a ByteDance shareholder. The board of directors has seven members with an American majority, and Shou Chew — TikTok's global CEO — keeps a seat at the table.

The $14 billion valuation is striking for how low it is. Independent estimates valued TikTok's US operations between $35 billion and $50 billion. ByteDance globally is worth roughly $480 billion. Considering that TikTok US is projected to generate over $17 billion in advertising revenue in 2026 alone, someone got an extraordinary deal.

And it wasn't the US Government.

What ByteDance Keeps (and Nobody Wants to Discuss)

This is where the deal stops looking like a "sale" and starts looking like a franchise:

• Algorithm intellectual property: ByteDance didn't sell the recommendation algorithm. They licensed it. Oracle gets a copy that must be "retrained from the ground up" using exclusively US user data.
• TikTok Shop: The e-commerce division — already representing 20% of US social commerce and projected to reach 25% by 2027 — stays with ByteDance.
• Advertising and marketing division: Also remains under Chinese control.
• Up to 50% of profits: According to Bloomberg, ByteDance could collect up to half of US profits as licensing fees.
• 19.9% equity stake: Just below the 20% cap mandated by law.

Former Treasury official Jim Secreto put it bluntly: "The law requires a clean break from ByteDance. This structure doesn't meet that standard. It looks more like a franchise deal that leaves TikTok's core technology in China."

Oracle: The Trusted Partner Renting Servers

Oracle holds the title of "Trusted Technology Partner." In practice, this means:

• All US user data is hosted on Oracle Cloud Infrastructure (OCI)
• Primary data centers in Northern Virginia, Hillsboro (Oregon), and a managed facility in Texas
• 100% of US user traffic already routes through OCI since Project Texas
• Continuous source code review and independent third-party audits

Sounds robust — until you read what TikTok's own Head of Global Cyber Defense said: "It's almost incorrect to call it Oracle Cloud, because they're basically giving us bare metal and we build our VMs on top of it."

For Oracle, the benefit is clear: recurring infrastructure revenue and a story to tell Wall Street. Its infrastructure-as-a-service revenue grew 68% to $4.1 billion in Q2 FY2026. But Oracle shares have dropped 50% from their September peak on capital spending concerns.

The Elephant in the Room: China Controls the Kill Switch

Since 2020, China has classified personalized recommendation algorithms as sensitive technology under its export-control regime. This gives Beijing veto power over any direct sale of the algorithm.

The implications are chilling:

• If tensions over Taiwan, tariffs, or Nvidia chip exports escalate, China could delay or block updates to the licensed algorithm
• TikTok becomes a permanent diplomatic bargaining chip
• The Atlantic Council describes the restructuring as "cosmetic reform" that doesn't address the underlying technical infrastructure

Michael Sobolik of the Hudson Institute was direct: "The real concern here isn't the data that it's being trained on. It's what the algorithm is emphasizing or censoring. And Beijing is going to be the one that retains control over those decisions."

Timeline: A Year Under the Threat of a Ban

Understanding this deal requires looking at the full journey:

Five executive orders in twelve months. TikTok was technically under a de jure nationwide ban from January 19, 2025 to January 22, 2026 — though it was never enforced.

What Changes for 200 Million Users?

The short answer: less than you think.

• No need to download a new app
• The algorithm will be "retrained" with US data, which Forrester analyst Kelsey Chickering says will make the feed feel "distinctly American"
• Global content will still appear, but its ranking will change
• Creators will keep their followers and, according to TikTok, will remain "discoverable at a global scale"

But legitimate concerns exist. Users fear the feed could begin favoring politically aligned content with the Trump administration, given that most consortium investors are business leaders who have shown sustained loyalty to the president.

Georgetown professor Anupam Chander was blunt: "We may have traded the possibility of foreign propaganda for the possibility of domestic propaganda."

Competitors Are Rubbing Their Hands

During the year of uncertainty, competitors wasted no time:

• YouTube offered incentives to advertisers to redirect budgets
• Snapchat pitched audience overlap data: 60% of US users 18+ also use TikTok daily
• Meta (Instagram Reels) positioned itself as the primary refuge for creators

If the retrained algorithm fails to replicate TikTok's original magic, a mass migration to YouTube Shorts and Instagram Reels is inevitable. Forrester already recommends advertisers "start diversifying to other channels."

Separately, TikTok and Snapchat settled a landmark youth addiction lawsuit in Los Angeles in January 2026. Meta and YouTube are heading to trial — compared by media to Big Tobacco litigation in the 1990s. Mark Zuckerberg is expected to testify.

The Numbers That Matter

Frequently Asked Questions

Did Oracle buy TikTok?

Not exactly. Oracle leads a consortium that acquired 80.1% of TikTok's US operations for $14 billion. Oracle itself owns 15%. ByteDance retains 19.9% and the algorithm's intellectual property.

Is TikTok going away in the United States?

No. The deal eliminates the ban threat. Users don't need to download a new app or worry about losing their accounts or content.

Does China still control TikTok's algorithm?

Technically, Oracle must retrain the algorithm with US data. In practice, ByteDance retains the intellectual property and China maintains veto power over updates through its export-control regime.

What happens to TikTok Shop?

The e-commerce division remains under ByteDance's control and is not part of the sale. This includes all the e-commerce infrastructure that generates 20% of US social commerce.

Will TikTok creators lose their followers?

No. TikTok has confirmed that creators will keep their audiences and remain discoverable globally. However, algorithm changes could affect content reach.

My Verdict

I won't sugarcoat it: this deal is a masterclass in corporate engineering. ByteDance has turned an imminent ban into a business where they retain what's most valuable (algorithm + e-commerce + up to 50% of profits), while American investors pay $14 billion for an operation valued at more than triple that amount.

For users, little changes in the short term. For national security, the fundamental concerns — algorithm control and Beijing's influence — remain unresolved. And for Oracle, it's a calculated bet: more cloud infrastructure revenue in exchange for a title that sounds better than it really is.

Senator Ed Markey summed it up: "This TikTok deal raises many more questions than answers." After analyzing the details, I have to agree.