TikTok officially launched its new United States subsidiary in January, the final part of its process to avoid a ban in the country. The deal, which the U.S. government valued at around US$14 billion, separates the platform’s U.S. operations into a new joint venture with reduced involvement from China-based parent company ByteDance.
For over 200 million U.S. TikTok users, this could result in differences in the videos they are recommended or are able to post, as well as the personal data the app collects. Downloads of alternative social media apps have spiked amid concerns about censorship.
Why is this happening?
TikTok’s U.S. joint venture subsidiary was finalised on 22 January. Under a law passed in 2024, TikTok was required to divest its U.S. operations or be banned, with lawmakers citing national security issues over its China-based owner, ByteDance.
A ‘divest-or-ban’ law was first proposed in 2020, and its enforcement was delayed several times after U.S. President Donald Trump took office as prospective buyers courted the app.
Software company Oracle, private equity company Silver Lake, and Emirati state-owned fund MGX will each have a 15% stake in the joint venture, known as TikTok USDS. ByteDance, TikTok’s parent company, will retain a 19.9% stake.
Oracle will manage TikTok’s U.S. users’ data, and has been the app’s cloud technology provider since 2020. It became a minority investor in TikTok Global at that time.
The company had also joined an investor group bidding to buy TikTok’s U.S. operations that year. While the deal was approved by ByteDance and the U.S. government, it fell through after the U.S. and China disagreed on whether ByteDance would be involved with TikTok’s U.S. entity.
What’s changing for US TikTok users?
Under the new joint venture, TikTok USDS will retrain the app’s algorithm using only data from U.S. users.
TikTok’s algorithm determines which videos appear on users’ ‘For You’ home pages, and reportedly uses factors including Likes, comments, and the amount of a video a user watches to gauge their interest in different types of content. It is among the app’s most widely-acclaimed features, with a 2022 study finding that social media users view the TikTok algorithm as far more responsive to their interests than algorithms on Facebook or Instagram.
TikTok USDS will “retrain, test, and update the content recommendation algorithm on U.S. user data,” according to the company. This version of the algorithm will be stored in Oracle’s U.S.-based cloud infrastructure, alongside all U.S. user data.
Similarly, TikTok USDS will now control content moderation for U.S. users.
While the joint venture has not yet said if its moderation policies differ from prior versions of TikTok, California Governor Gavin Newsom has launched a review into the company over allegations that TikTok USDS may be censoring content criticising the Trump administration. (TikTok USDS has attributed users’ difficulty posting these videos to a power failure at one of its data centres.)
TikTok USDS and TikTok’s global operations will also now have differing data privacy policies. TikTok USDS will be able to collect precise location data from users, though these features have not yet been enabled in the U.S. Previous versions of the app could only collect approximate location information from U.S. patrons based on SIM card connectivity or IP addresses.
Meanwhile, ByteDance will retain control over TikTok USDS’ e-commerce and marketing features. TikTok Shop, its e-commerce platform, represented almost 20% of U.S. social commerce sales in 2025, per Emarketer’s December forecast.
“TikTok Shop has used its social influence to become a hyper-effective product discovery and recommendation engine, while also plowing money into discounts and incentives to increase its appeal to buyers and sellers,” said Emarketer retail and ecommerce analyst Rachel Wolff.
Azzet has contacted TikTok USDS for comment.
Are users leaving TikTok?
Competitors to TikTok have seen a surge in downloads after TikTok USDS was formed, as some users seek out alternative platforms.
Upscrolled, an app including photos and text posts as well as short-form video, became the #1 downloaded free app in Apple’s App Store in the U.S. in late January, days after the joint venture deal was completed. Launched in July 2025 and based in Australia, Upscrolled has said it will not censor users’ content.
“With the deal being signed, people thought, okay, that’s it, we’re not going to be on TikTok anymore. Content moderation on TikTok is gonna change,” Upscrolled founder Issam Hijazi said, citing allegations that pro-Palestinian content is now being censored.
Most of Upscrolled’s new users are from the U.S., per Hijazi. The app now has more than 1 million users, climbing from just 40,000.
U.S. downloads of other social networking apps also increased in the days after the deal, per Sensor Tower data. Discord had risen two spots in the U.S. App Store’s ranking of free social media apps by 25 January, while Reddit climbed one place in the Google Play store’s.
Azzet has contacted Upscrolled for comment.
