The Deal Is Real. The Problem Is Still Real.

TikTok announced a new joint venture structure that puts U.S. investors, including Oracle, in majority control of a new entity called TikTok USDS Joint Venture. ByteDance, TikTok's Chinese parent company, retains a 19.9 percent ownership stake — just under the threshold that would trigger mandatory CFIUS review.

Sounds like a win. It isn't.

According to the Atlantic Council, a December 2025 memo from TikTok CEO Shou Zi Chew confirmed that ByteDance keeps ownership of the algorithm's intellectual property and merely licenses it to the joint venture for a fee. Oracle gets to inspect the code. ByteDance keeps the keys.

What the Algorithm Actually Does

The algorithm isn't just a recommendation engine. It decides what 170 million Americans see — what goes viral, what gets buried, what ideas spread and which ones die.

Rep. Jake Auchincloss (D-MA), speaking on C-SPAN's Ceasefire, put it plainly: "TikTok is the single greatest ideological weapon this world has ever seen, and the Chinese Communist Party is in control of it."

Rep. Dan Crenshaw (R-TX) agreed and called for immediate congressional oversight: "We need to do oversight on that deal and push to what the legal objective was."

These aren't fringe voices. These are members of Congress from opposite parties reading from the same sheet of music. That almost never happens.

This Is Project Texas — Reheated

If you've been paying attention, you've seen this movie before.

Hudson Institute Senior Fellow Michael Sobolik documented that the current deal is essentially a resurrection of "Project Texas" — the same framework ByteDance pitched to Washington back in 2022. Under that plan, U.S. user data moves to Oracle's cloud infrastructure in Texas, Oracle audits the algorithm, and third-party inspectors verify compliance.

The Committee on Foreign Investment in the United States (CFIUS) rejected Project Texas after years of review. Congress looked at it and passed a divestiture law anyway.

Now the Trump administration is accepting a version of it.

As Rep. John Moolenaar, Chairman of the House Committee on the Chinese Communist Party, noted: "Even after Project Texas was rolled out, Americans' data kept flowing to China, and ByteDance still had the power to censor and quietly manipulate users through TikTok's algorithm."

The plan failed once. Nobody has explained why it works now.

What's Actually New Here

The Information Technology and Innovation Foundation (ITIF) analyst Daniel Castro argued on January 26, 2026 that the new structure does successfully remove TikTok from direct CCP legal jurisdiction — a real change from before. China's Cybersecurity Law, Data Security Law, and Personal Information Protection Law all allow Beijing to compel Chinese companies to hand over data. A genuinely U.S.-domiciled entity operating under U.S. law breaks that chain.

ITIF's Castro also noted that "Project Texas" cornerstone security architecture — data stored on Oracle servers, governed by an independent board, with U.S.-based personnel — could serve as a blueprint for handling other Chinese apps like Temu and Shein, which face similar risks and zero similar scrutiny.

It's a legitimate point. But it only holds if the algorithm is actually outside ByteDance's control. It isn't.

The Atlantic Council's Honest Complication

The Atlantic Council's analysis raises a hard question: does it even matter if TikTok's algorithm stays Chinese-owned when U.S.-based platforms already run influence operations, and data brokers are selling granular American behavioral data to anyone with a credit card?

Beijing doesn't need TikTok to run disinformation campaigns. It's already doing it on X, Facebook, and YouTube — platforms with zero CCP ownership.

This doesn't argue for letting ByteDance keep the algorithm. It's an argument that the U.S. has a much bigger data security problem it isn't addressing, and TikTok is the only part of it getting political attention because it's easy to demagogue.

What Congress Actually Passed

Most coverage glosses over this part.

Congress passed a divestiture law. Full divestiture. Not a licensing arrangement. Not a joint venture where ByteDance keeps 19.9 percent and owns the algorithm's intellectual property. An actual sale where ByteDance is out.

The deal on the table does NOT comply with that law. Crenshaw and Auchincloss both said so explicitly. The Trump administration is accepting a compromise that Congress already rejected — without asking Congress.

That's a constitutional problem, not just a national security problem.

What This Means for You

If you use TikTok, the algorithm feeding you content is still ByteDance's property. The Chinese Communist Party retains legal tools to influence what ByteDance builds and maintains. The deal changes where your data sits. It does NOT change who controls what you see.

For regular Americans: this deal is cosmetic. It's designed to let TikTok stay live, Oracle get paid, and politicians claim victory.

Nobody fixed the actual problem. They negotiated around it, slapped a U.S. flag on the front door, and claimed victory.