What Happened?
TikTok now has a majority-U.S. ownership structure, but questions remain about whether China still has meaningful influence over the app and its data. The Congressional Research Service (CRS), the nonpartisan research arm of Congress, analyzed TikTok's restructuring and what it means for national security.
Under the deal approved by President Donald Trump, TikTok's U.S. business moved into a joint venture with majority-U.S. ownership. ByteDance, TikTok's Chinese parent company, kept a 19.9 percent stake in that venture.
ByteDance also kept ownership of the underlying software that powers TikTok's recommendation algorithm, the system that decides which videos you see. The new U.S.-majority venture licenses a copy of that algorithm but does not own it outright.
Why Does it Matter to Me?
TikTok serves 82 million daily active U.S. users, making it a significant platform for data collection and potential influence.
ByteDance keeps a 19.9% stake in TikTok's U.S. joint venture and still owns the underlying intellectual property for the algorithm, and some members of Congress have raised questions about ongoing ties to China and influence over TikTok given those holdings.
The Trump administration argues the restructuring places operation of the algorithm, content moderation, and recommendation models under the control of the new joint venture, with retraining and monitoring by trusted U.S. security partners.
Both Sides, Now
The administration contends the arrangement resolves the national security concerns that led Congress to require a divestiture in the first place. It also argued that existing federal rules barring TikTok from government devices should no longer apply now that the deal is in place.
Critics in Congress argue that ByteDance's 19.9 percent stake and its ownership of the algorithm's intellectual property leave the door open to Chinese government influence. That concern has precedent: BuzzFeed News reported in June 2022 that audio from internal TikTok meetings captured employees discussing China-based staff accessing U.S. user data, and Reuters reported in December 2022 that ByteDance said employees had improperly accessed the data of two U.S. journalists while trying to identify company leaks.
A firm backed by China's internet regulator holds a 1 percent stake in Douyin Information Service Co. Ltd., which holds licenses to some of ByteDance's core PRC technology, and that stake gives the firm a board seat.
What Happens Next?
The Trump administration has reportedly deliberated whether to let Chinese company Tencent keep holdings in U.S. and foreign gaming companies, including Epic Games, Riot Games and Supercell. Some members of Congress have questioned whether the restructuring sufficiently separates TikTok's U.S. operations from Chinese influence, pointing to ByteDance's retained 19.9% stake.
The central question Congress must answer: does a 19.9 percent stake and algorithm ownership by a Chinese company leave American users' data and feeds beyond Beijing's reach?
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