ByteDance will retain a larger-than-expected role in TikTok’s new US entity, three sources familiar with the matter told Reuters on Friday, raising questions about whether the deal meets legal requirements to separate the Chinese parent company from the app’s US operations.

Under a law passed in 2024, ByteDance was required to sell its US assets or face a ban, following national security concerns in Washington about user data and the app’s algorithm.

Two-part structure

The sources said the current plan, still under discussion, would divide TikTok’s US business into two companies. A joint venture led by Oracle, Silver Lake, and other investors would manage US user data, content, and algorithms. ByteDance is expected to be the largest minority shareholder in that venture.

A separate division, remaining wholly owned by ByteDance, would oversee revenue-generating businesses such as advertising and e-commerce.

This arrangement means ByteDance would continue to play a significant role in TikTok’s US operation, while formally ceding control of sensitive data and algorithms. Critics in Congress are likely to question whether such a structure represents a full divestment.

Valuation and politics

Trump’s deputy, J.D. Vance, valued the deal at about $14 billion—well below earlier analyst estimates of $30–40 billion.

Chinese media reports on Friday described the proposed structure as a two-part arrangement, but outlets including LatePost and Caixin later retracted those stories.

Saving TikTok in the US carries political weight for President Donald Trump, who frequently cites the platform’s importance in reaching younger voters. Trump has 15 million followers on his personal TikTok account and credits the app with helping him win reelection last year. The White House also launched an official TikTok account last month.