The development comes after years of legal and political challenges, which threatened to ban the app for more than 200 million Americans.

The new entity, TikTok USDS Joint Venture LLC, will house U.S. user data and algorithms under strict cybersecurity measures. American and global investors will hold 80.1% of the venture, leaving ByteDance with 19.9%. 

Oracle, Silver Lake, and Abu Dhabi-based MGX are the managing investors, each with a 15% stake. TikTok’s U.S. data and recommendation algorithm will be hosted on Oracle’s U.S. cloud, allowing oversight while ByteDance continues to manage revenue-generating operations like advertising and e-commerce.

The venture’s leadership includes former TikTok USDS executives Adam Presser as CEO and Will Farrell as chief security officer. TikTok CEO Shou Chew joins the board to provide strategic guidance. 

The JV will retrain and update TikTok’s content algorithm to ensure it operates solely on U.S. user data.

This deal results from the Protecting Americans from Foreign Adversary Controlled Applications Act, passed in April 2024. The law required ByteDance to divest TikTok’s U.S. assets or face a nationwide ban, a provision upheld by the Supreme Court in January 2025. 

Without the divestiture, TikTok risked removal from app stores and halted updates, which could have significantly weakened the platform’s U.S. presence.

The agreement received bipartisan attention. Former President Donald Trump, who first tried to ban the app in 2020 over national security concerns, praised the venture as “owned by a group of Great American Patriots and Investors.” 

The White House confirmed that both U.S. and Chinese authorities signed off on the deal, although the Chinese Embassy in Washington has not yet commented publicly.

The joint venture is part of a U.S.-China technology rivalry. In separating U.S. user data and algorithms from ByteDance’s global operations, the structure aligns with earlier national security debates surrounding Chinese tech firms. 

TikTok’s U.S. operations are effectively split, the venture oversees data and backend operations, while ByteDance maintains commercial operations, including e-commerce and advertising.

Investors include high-profile firms such as the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital. 

TikTok aims to comply with U.S. law and also to reassure users and regulators about data security while maintaining the app’s growth and influence in the U.S.

With a budget of $500 billion over the next four years, the project aims to enhance computing capacity, create hundreds of thousands of jobs, and strengthen national security. 

An initial $100 billion will be deployed immediately, starting with a flagship data centre project in Texas.

SoftBank and OpenAI are the lead partners, with SoftBank handling financial responsibilities and OpenAI overseeing operations. 

Masayoshi Son, SoftBank’s CEO, has been named chairman of Stargate, with major stakeholders including MGX, NVIDIA, Arm, and Microsoft. Speaking about the scale of the project, Oracle co-founder Larry Ellison said, “Each building is a half a million square feet. There are 10 buildings currently being built.”

The Stargate initiative has already begun construction in Texas, marking the launch of its first data centre, which will eventually expand to other states. These facilities will include cutting-edge AI computing systems developed collaboratively by OpenAI, NVIDIA, and Oracle. 

The partners have also announced plans to scale up to 20 data centre installations by 2029, evaluating additional sites across the country to accommodate future expansion. Reports reveal that these data centres will include innovative AI chips designed by OpenAI, with semiconductor giants Broadcom and TSMC involved in chip production.

A Network of Collaborations

The project builds on longstanding partnerships. OpenAI and NVIDIA have collaborated since 2016, while OpenAI’s relationship with Microsoft has grown through its extensive use of Microsoft Azure for AI model training. Oracle’s existing agreements to supply AI computing resources also strengthen its role in the venture.

SoftBank’s deep involvement in OpenAI predates this project as the company previously committed $500 million to OpenAI’s funding round and an additional $1.5 billion to facilitate a tender offer for its employees. Again, Middle East AI fund MGX, which has invested in OpenAI, will also be leveraged in Stargate.

While the Stargate Project has good prospects, issues about environmental and social impacts haven’t been ignored. Data centres, known for their heavy water usage and high energy consumption, could stress resources in regions with limited infrastructure. Issues about the long-term job creation promised by similar large-scale projects have also been raised.

Nonetheless, experts like Goldman Sachs projects that AI-related data centre demand will account for nearly 19% of total power consumption by 2028, noting the sector’s quick expansion. A McKinsey report forecasts that spending on data centre infrastructure could exceed $250 billion within the next five years.

OpenAI CEO Sam Altman has called for fewer regulatory limitations to accelerate the development of critical infrastructure projects in the United States. Highlighting challenges in an interview, Altman said, “The thing I really deeply agree with [President Trump] on is, it is wild how difficult it has become to build things in the United States… Power plants, data centres, any of that kind of stuff. I understand how bureaucratic cruft builds up, but it’s not helpful to the country in general.”

Nonetheless, the Stargate Project has garnered support from stakeholders and government officials. Hence, with a focus on re-industrialisation and innovation, the initiative is expected to bolster AI infrastructure and boost the United States’ innovation in global AI leverage.