ByteDance: TikTok U.S. Deal and Massive AI Investment

TikTok is entering a new chapter of its global story. Its parent company, ByteDance, has concluded an agreement to establish a joint venture for U.S. operations. At the same time, it plans to invest approximately $23 billion into artificial intelligence and infrastructure by the end of 2026. These steps may significantly affect the technology industry and the future of AI as such.

About the company

ByteDance was founded in 2012 in Beijing. It was established by entrepreneur Zhang Yiming. From the beginning, the company has focused on the development of digital platforms and working with data. The company’s most well-known product is TikTok, which ranks among the largest social networks in the world with more than one billion users. ByteDance is engaged in the development of recommendation algorithms, advertising technologies, and AI solutions for content creation. In recent years, it has increasingly focused on building its own AI infrastructure, developing large language models, and achieving long-term technological independence. The company’s goal is to become a global leader in artificial intelligence and next-generation digital platforms.

New U.S. venture

ByteDance has entered into an agreement with U.S. investors, including Oracle, Silver Lake, and the investment group MGX, to establish a joint venture called TikTok USDS Joint Venture LLC. This new entity will control the U.S. operations of the social network TikTok and address concerns regarding security and data protection. U.S. investors will hold a majority stake of 50% ownership, while ByteDance will retain approximately 19.9%. The remaining roughly 30.1% will belong to ByteDance’s existing investment partners. Under the agreement, the new company will manage the storage and protection of U.S. user data and ensure content moderation and algorithm security. This step helps TikTok avoid a potential ban on its operations in the United States and thus continue providing services to millions of American users.[1]

Why the deal was created

The agreement comes after years of pressure from U.S. officials who expressed concerns about potential data collection and possible user influence. Previous laws and regulations required ByteDance to sell its U.S. division, otherwise TikTok would face a ban. The new business structure means that U.S. investors and managers will have control over key operations of the application in the United States. The creation of this joint company represents a compromise between security pressure and the interest in maintaining access to the platform for more than 170 million American users. In addition, the new venture will be responsible for ensuring that TikTok’s algorithm is trained on U.S. data, which is intended to prevent alleged external manipulation of content in the country.[2]

The role of Oracle

Oracle has a specific and fundamental role in this agreement. It serves as a trusted security partner, meaning that it will manage the cloud infrastructure for the storage and protection of U.S. user data. Oracle is responsible for a secure environment that meets U.S. national security standards, thereby minimizing risks associated with potential access by foreign powers to sensitive information. In addition, Oracle plays a significant role in ensuring algorithmic neutrality and the technological operation of the new joint venture, thereby providing confidence to regulators and users. Following the announcement of this agreement, Oracle shares strengthened on Wall Street, reflecting market expectations of positive business impacts from this transaction.[3]

Massive investment in AI

ByteDance plans to significantly increase its spending on artificial intelligence and infrastructure in 2026. According to the report, the company will invest ¥160 billion, which is approximately $23 billion, into AI technologies and infrastructure. This amount represents a significant increase compared to investments from the previous year. Approximately half of this investment will be allocated to acquiring advanced semiconductors and AI processors needed for training and operating large artificial intelligence models. Specifically, they plan to purchase 20,000 H200 graphics cards as part of a trial order, with each card costing approximately $20,000. ByteDance is thus responding to growing competition from U.S. technology giants such as Microsoft, Google, Amazon, and Meta, which have already invested hundreds of billions of dollars into AI.[4][5

What this means for TikTok

These two major events may significantly influence the direction of TikTok as well as the broader technology sector. The joint venture agreement means stability for TikTok in the United States and the continuation of its growth in one of the most important advertising and social platforms in the world. It will also allow companies and creators to continue using the platform without interruption. The enormous investment into AI infrastructure positions ByteDance to compete with global technology leaders. These investments could lead to improvements in recommendation algorithms, new tools for content creators, better advertising processing, and enhanced security features. Further innovations in AI may affect not only TikTok, but also other areas of digital services and artificial intelligence.

Conclusion

The agreement to establish a new U.S. venture and the plan to invest $23 billion into AI infrastructure by 2026 represent a major step for TikTok and its parent company ByteDance. The joint venture with U.S. partners will allow the platform to continue operating in the United States without the threat of a ban. Massive capital expenditures on AI increase TikTok’s competitive strength in the global technology sector. These changes will impact users, content creators, and investors, and will likely influence technological trends in the coming years. [1]

[1] Forward-looking statements are based on assumptions and current expectations that may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.

[1] https://apnews.com/article/tiktok-divestment-deal-trump-2fdb915cac5b6d06907a5a2de6764376

[2] https://www.reuters.com/business/american-investor-consortium-acquire-tiktok-us-entity-axios-reports-2025-12-18/

[3] https://variety.com/2025/digital/news/tiktok-us-joint-venture-deal-close-date-oracle-silver-lake-1236612315/

[4] https://www.investing.com/news/stock-market-news/bytedance-plans-to-lift-ai-spending-to-23-bln-in-2026-ft-reports-4420503

[5] https://seekingalpha.com/news/4534526-bytedance-plans-23b-capex-for-2026-with-focus-on-ai-infrastructure---ft