TikTok's U.S. Joint Venture: Key Findings
- ByteDance finalized a deal making TikTok U.S. 80.1% American-owned through Oracle, Silver Lake, and MGX, retaining only 19.9% ownership.
- App deletions increased 150% over five days following the deal announcement, though active user levels remain stable.
- Competing platforms (UpScrolled, Skylight Social, RedNote) saw download surges between 53% and 1000% as creators hedge distribution.
TikTok's parent company, ByteDance, signed a binding deal on January 22 to keep the social media platform alive in the U.S.
But this solution has triggered a bigger problem.
The deal makes TikTok U.S. 80.1% owned by American investors, with ByteDance retaining 19.9%.
Oracle, Silver Lake, and MGX will each hold 15% stakes.
The joint venture will control U.S. data protection, algorithm security, and content moderation.
However, daily app deletions increased 150% over five days following the announcement, according to digital intelligence platform Sensor Tower, as cited by CNBC.
View this post on Instagram
This spike followed prompts asking users to accept a revised privacy policy that explicitly references the collection of sensitive data, including:
- Racial or ethnic origin
- Sexual orientation
- Financial information
Though this existed in the August 2024 policy, its visibility during the ownership transition has amplified concerns.
For brands relying on TikTok, this represents a trust crisis that platform reassurances can't immediately solve.
Users' App Deletion Reveals Platform Fragility
Sensor Tower shows that TikTok's active user levels remained flat, despite the deletion spikes.
This sounds reassuring until you actually understand what it means.
Flat usage during deletions indicates new user acquisition is compensating for losses, but this reveals nothing about user quality.
Power users and creators driving disproportionate engagement may be leaving, while only casual viewers remain.
CNBC reported that creator Dre Ronayne, with 400,000 followers, deleted her TikTok account, posting:
"If I can delete my biggest platform because their terms of agreement and censorship have gotten out of control, so can you!"
When the users leaving matter more than the users staying, aggregate metrics become misleading indicators of platform health.
Competitors Capitalize on TikTok Uncertainty
TikTok hasn't explained to creators what the joint venture means for them, leaving influencers to hedge distribution across Instagram and YouTube.
The communication vacuum is notable because creators are what drive platform value.
@willfrancis24 How much is 1 million views on TikTok worth to a creator on the Creator Rewards Program? Let's have a look at the data! Here's what I've made on my TikTok videos in the last 30 days, my average RPM and what that averages out as for 1 million views. #creator#creatorfund#creators#creatorrewardprogram#contentcreators#contentcreation#contentcreatortips♬ original sound - Will Francis - Marketing + AI - Will Francis - AI + Marketing
When influencers with millions of followers start diversifying, their audiences will follow.
This creates a cascading effect where brand investment in TikTok-only strategies suddenly faces distribution risk.
Meanwhile, Sensor Tower shows that U.S. downloads for UpScrolled increased tenfold, while downloads for Skylight Social and RedNote also climbed dramatically.
Audiences migrate when trust breaks, and early adopters on new platforms often become power users who shape emerging communities.
TikTok's joint venture fallout offers three lessons for brands and agencies:
- Design contracts for portability. Require multi-platform presence and shared rights so creator value travels as platforms change.
- Watch real engagement quality. Track interaction depth and audience mix to spot erosion before topline numbers slip.
- Cap platform exposure early. Set spend limits per channel to avoid forced diversification during disruption.
When platforms solve legal problems by creating brand problems, single-channel strategies fail fastest.
Our Take: Is TikTok Still a Safe Marketing Investment?
I think that TikTok will remain viable for brands that treat it as one channel among many, but not as a core distribution strategy.
The joint venture solved the ban threat, but it then introduced new instability around data governance, algorithm changes, and creator retention.
Brands should maintain their TikTok presence while speeding up their investment in owned channels and platform alternatives.
I think the 150% deletion spike matters less than the trust erosion it reveals.
In other news, Netflix's $7+ billion Sony deal consolidates global Pay-1 rights, showing how platform concentration reshapes where brands find reliable audience reach.
Brands navigating platform instability need partners who understand how to build distribution resilience across channels.
Take a look at these top digital marketing agencies in our directory.
