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By Micah McCartney
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TikTok has dodged a ban in the United States through a deal with its Chinese owner, ByteDance. Yet concerns continue to dog the short-form video app—foremost being Beijing’s ability to spread propaganda on American soil.
President Donald Trump approved the $14 billion agreement by executive order in September following discussions with China’s Xi Jinping, in what was seen as a broader push to deliver a trade deal after months of tit-for-tat tariffs.
When the deal was finalized on January 23, a U.S.-led joint venture took control of data security and began retraining TikTok’s algorithm based on the American content ecosystem.
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Still, questions remain. While the newly formed TikTok USDS (U.S. Data Security) Joint Venture LLC—comprised of three managing investors, database management giant Oracle, private equity firm Silver Lake and Emirati AI company MGX—now operates TikTok’s U.S. platform, ByteDance appears to retain ownership of the underlying technology. Critics argue that the Chinese Communist Party could therefore still wield influence over the recommendation algorithm that shapes what Americans see on their For You pages.
The arrangement is a “surrender to Beijing,” said Michael Sobolik, a senior fellow at the Washington, D.C.-based Hudson Institute.
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It would appear that ByteDance retains control, and the new joint venture merely licenses the algorithm, Sobolik told Newsweek. “In that case, the new U.S. investors won’t have the ability to boost or suppress political content. Beijing would retain that leverage—which is deeply troubling.”
“China’s stance on TikTok is consistent and clear,” Chinese Embassy spokesperson Liu Pengyu said, referring Newsweek to the “competent authorities.”
Newsweek reached out to TikTok, Oracle and the White House via email with requests for comment.
A Timeline of the Deal
TikTok is a dominant force in global media consumption, with two billion users worldwide—including some 200 million users and 7.5 million business accounts in the U.S. alone.
Controversy over the Chinese app emerged in 2019, during Trump’s first term, as relations with Beijing took a nosedive over a range of grievances, from trade practices to the crackdown on democracy in Hong Kong. Meanwhile, the app skyrocketed in popularity, with its global user base growing nearly five-fold in 2018 alone.
This success, combined with Chinese companies’ legal obligation to share data with the government upon request, drew suspicions TikTok could serve as a vector for pro-CCP influence operations. India and several other countries banned the app outright, while others—including the United Kingdom and Canada—barred it from government-issued phones.
Former President Joe Biden signed legislation ordering ByteDance to divest TikTok by January 19, 2025, or see it banned.
After returning to office that month and meeting TikTok’s CEO, Trump softened his rhetoric. He gave TikTok a 75‑day reprieve, followed by three additional extensions before the deal was ultimately finalized on January 23.
“I am so happy to have helped in saving TikTok! It will now be owned by a group of Great American Patriots and Investors...and will be an important voice,” the president wrote on Truth Social.
“It is hoped that the United States will provide an open, fair and non-discriminatory business environment for Chinese enterprises to invest in the United States,” China’s Ministry of Foreign Affairs said following announcement of the deal.
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Algorithm Under Scrutiny
Under the restructuring agreement, the three managing investors each hold a 15 percent share in TikTok USDS. ByteDance’s share will be reduced to
19.9 percent minority ownership. It’s also set to retain ownership of TikTok’s algorithm, while TikTok USDS receives a license. This has set off alarm bells in Washington, including Republican lawmakers, who fear ByteDance remains positioned to propagate CCP narratives while suppressing content on sensitive topics such as Xinjiang or Tiananmen Square.
“The Chinese Communist Party cannot be allowed to weaponize an app to divide and weaken our country,” said John Moolenaar, chair of the House Select Committee on China. “Does this deal ensure China does not have influence over the algorithm? Can the parties involved assure Americans their data is secure? Those are questions that need to be answered as the Select Committee conducts oversight.”
USDS sought to allay those concerns, stressing it would “retrain, test and update” the algorithm. This would rely solely on American user data, the statement said, which would be hosted in a cloud environment run by Oracle.
An Opportunity for Beijing?
Reports are most likely correct that ByteDance will retain the algorithm, Kenton Thibaut, senior resident China fellow at the Atlantic Council’s Digital Forensic Research Lab, told Newsweek. But she doubts the arrangement is a game-changer for Chinese propagandists.
“While the CCP could ostensibly leverage TikTok’s recommendation algorithm to spread pro-Beijing messages and try to undermine U.S. democracy, the reality is that the CCP is already engaged in these activities on U.S.-based platforms and will continue to do so even if TikTok were banned or otherwise restricted in the United States,” she said.
She thinks too that the risk has been overblown to the extent that the Chinese government could collect user data for surveillance or influence public opinion. She noted that it is also tracking data through Western social media companies, and third-party data brokers. “The data generated through TikTok is not significantly different from that generated and collected by other tech companies, nor the most concerning source of data on Americans that the Chinese state currently has access to through legal means,” she added.
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