ByteDance has officially restructured TikTok’s U.S. operations to avoid a total ban. According to business filings released Tuesday, the Chinese tech giant has reduced its stake to exactly 19.9%, a move designed to satisfy national security regulators while keeping the app alive on American phones.
The deal, which brings the $1.5 billion “Project Texas” security plan back to life, hands majority control to a group of trusted U.S. investors.
The Magic Number: 19.9%
Why did they choose 19.9%? In corporate law, owning less than 20% typically means you are a “passive investor.”
By staying just under this threshold, ByteDance argues it no longer controls the company. This allows them to bypass the “foreign adversary” classification that led to the threatened ban. They still profit from the app’s success, but they no longer hold the keys to the boardroom.
The New American Owners
To replace ByteDance’s control, two heavyweights have stepped in. Oracle and tech billionaire Michael Dell are leading the new ownership group. Oracle’s role is critical. They are not just investors; they are the “keepers of the code.” Under the terms of the deal, all U.S. user data will live on Oracle’s servers, physically located in Texas. This creates a digital firewall that supposedly prevents any data from leaving the country.
Project Texas 2.0
This restructuring revives “Project Texas,” a massive security initiative that was previously stalled. The plan involves spending $1.5 billion to separate TikTok U.S. from its Chinese parent company. Security analysts note that while ByteDance is still in the picture, their power is gone. “The 19.9% rule is a legal shield,” notes a tech policy expert. “It allows the U.S. government to claim victory by ‘Americanizing’ the app, while ByteDance keeps a financial foothold.”
SOURCES
- Securities and Exchange Commission (Form 8-K Filing Jan 2026)
- Oracle Corporation (Press Release)
- The Wall Street Journal (Deal Analysis)