TikTok's US Joint Venture Still Runs on ByteDance's Licensed Algorithm as the Company Skips a House China Committee Hearing

TikTok’s security chief was due to testify before the House Select Committee on China on 15 September. On 27 August the company pulled out, citing litigation over child safety. Committee chair John Moolenaar said it “really undermines their credibility,” and that he couldn’t tell whether the decision came from TikTok’s new US company or from ByteDance in Beijing.

That’s the question Congress has been asking since the US deal closed on 22 January 2026.

The law and the deal

In April 2024 Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act. It required ByteDance to sell TikTok’s US business by January 2025 or see it banned from US app stores. The Supreme Court upheld the law on 17 January 2025, and TikTok briefly went dark. On his first day in office the President told the Justice Department not to enforce it, and extended that several times.

In September 2025 Executive Order 14352 declared a planned joint venture a “qualified divestiture” under the law. It required the venture to control the algorithm, code and content moderation, with the recommendation system retrained on US data under trusted security partners, and capped ByteDance below 20%.

The TikTok USDS Joint Venture closed in January. Oracle, Silver Lake and MGX of Abu Dhabi hold 15% each, ByteDance 19.9%, and affiliates of ByteDance’s existing investors much of the rest. ByteDance appoints one of seven board members. Adam Presser is chief executive.

The algorithm

The law barred any “operational relationship” between the US company and ByteDance, including cooperation on the recommendation algorithm. Under the deal, according to reporting on the security chief’s planned testimony, ByteDance keeps ownership of the algorithm and licenses it to the venture for a fee. The venture retrains it on US data in Oracle’s cloud, and Oracle audits compliance.

Moolenaar asked in January whether a “Bytedance-licensed algorithm” leaves room for Chinese influence. Senator Ed Markey wrote in May that the White House had given “virtually no details” on whether the algorithm is free of it. A group called the Public Integrity Project sued in March, on behalf of two engineers, arguing the deal violates the law. The case is pending in the D.C. Circuit.

The money

The Wall Street Journal reported in March that the government is set to receive about $10 billion for its role in arranging the deal, with $2.5 billion paid to Treasury at closing. Vice President Vance put the venture’s value at about $14 billion, which analysts called low. A government fee on a private sale is unusual, much like the 25% cut on Nvidia chip sales to China.

In August TikTok and ByteDance agreed to pay $400 million to settle a Justice Department lawsuit over children’s data, subject to court approval.

Why it matters

The 2024 law passed with large bipartisan majorities because members of both parties saw Chinese control of a major US media platform as a security risk. The executive has now decided what compliance means, with limited public detail, and Congress has had no testimony from the new company. The committee wants a hearing with Presser before the end of the year. Whether it happens, and what he says about the licence, is the main way Congress can check the deal.