80.1% of TikTok U.S. Data Security (TikTok USDS) now sits with American and global investors, per the divestiture agreement, and that ownership split is the mechanism behind the Department of Justice reversing a ban that blocked federal employees from installing TikTok on government devices. The DOJ's Office of Legal Counsel issued a memo to the deputy counsel to President Donald Trump, concluding that the restructured entity's American-controlled version "poses no such risk" to national security. ByteDance retains 19.9%.
The legal architecture of the reversal
A 2022 law barred federal workers from having TikTok on their government devices, citing national security concerns about data collection practices and the relationship with a foreign adversary. The DOJ opinion concluded that ByteDance's transfer of control to TikTok USDS eliminated those risks. It added that ByteDance's continuing minority position "makes no practical difference."
The underlying mandate came from a 2024 law, passed with bipartisan support and signed by President Joe Biden in April of that year. The law required ByteDance to divest TikTok's U.S. operations or face removal from U.S. app stores and internet-hosting services. TikTok challenged it on First Amendment grounds. On January 17, 2025, the Supreme Court rejected that argument, affirming Congress's authority given "well-supported national security concerns regarding TikTok's data collection practices and relationship with a foreign adversary."
Structure of the new entity
ByteDance transferred control of TikTok's U.S. user data and operations to TikTok USDS, with the deal finalized in January. Oracle, Silver Lake, and Emirati investment firm MGX are among the most prominent investors in the new venture. U.S. user data is stored in Oracle's secure cloud, and TikTok's recommendation algorithm is being retrained on U.S. user data.
The app reaches roughly 200 million American users.
What the clearance does not settle
Federal agencies retain discretion over whether employees actually install the app, per the memo. A separate legal challenge, alleging the deal "subverted" congressional authority, remains active. The enforcement timeline shifted repeatedly before the restructuring closed: the law was set to take effect January 19, 2025, but Trump delayed enforcement after returning to office, granting time for investor interest to develop. ByteDance's 19.9% minority position is the single structural fact the DOJ reversal rests on.