My Comprehensive Plan to Save TikTok in the U.S.
I’ve been thinking a lot about how to resolve the tension between TikTok’s popularity in the United States and the new legislation threatening to ban or force the sale of apps controlled by certain foreign adversaries. As it stands, TikTok is owned by ByteDance, a Chinese company, and that puts it squarely in the crosshairs of U.S. national security concerns. On top of that, China doesn’t allow the outright sale of key intellectual property—like TikTok’s famous recommendation algorithm—to foreign entities.
I believe there’s a way to thread the needle here, maintaining TikTok as we know it while complying with U.S. law, respecting Chinese regulations, and ultimately benefiting American users and possibly even making them part of the platform’s ownership. Here’s the plan I’ve come up with, in detail:
Understanding the Problem
The U.S. recently passed legislation targeting “foreign adversary controlled” applications. If a foreign adversary controls 20% or more of a U.S. company—or has actual operational influence—then that U.S. entity could be banned. ByteDance, as a Chinese firm, is considered such a foreign adversary. So if ByteDance continues to own a big chunk of TikTok’s U.S. operations, and especially if it has any say in how TikTok runs in the U.S., we risk a total shutdown or forced sale.
Meanwhile, China imposes strict controls on exporting core technology, meaning ByteDance can’t just hand over TikTok’s secret recommendation algorithm. That algorithm is what makes TikTok so engaging. Losing it or breaking it could ruin the platform’s magic.
My solution: Restructure TikTok’s U.S. presence into a majority U.S.-owned and operated company, keep ByteDance’s stake below 20% (thus no “foreign adversary control”), run all U.S. operations independently, and license the algorithm instead of selling it. Add rigorous checks and audits, ensure no one—foreign or American—can sneak off with the source code, and eventually let Americans invest, even as regular users.
Step-by-Step Restructuring Plan
1. Establish a New American Company:
First, we’d create a U.S.-based corporation—let’s call it “TikTok U.S. Holdings, Inc.” This new entity would fully own and operate TikTok’s U.S. business. All U.S.-related servers, user data, staff, marketing, and so forth move under this American umbrella. Right now, TikTok U.S. isn’t separate; it’s just part of ByteDance’s global structure. Making it a standalone U.S. company sets the stage for changing how it’s owned and controlled.
2. Adjust Ownership to Remove Foreign Control:
We need ByteDance’s share in this U.S. company to drop below 20%. Why 20%? Because the new law uses that threshold: at or above 20% could mean foreign adversary control. Below 20% means ByteDance can’t be considered controlling.
So, ByteDance sells a big portion of its ownership in TikTok U.S. to American investors. For instance, Frank McCourt’s Project Liberty reportedly has around $20 billion in commitments to buy in. With these U.S. investors taking the majority stake—over 80%—TikTok U.S. instantly becomes an American-led company.
ByteDance keeps a small, minority share, but no veto rights, no board seats, no special treatment. It’s just a passive shareholder. That ensures ByteDance can’t call the shots, satisfying U.S. national security concerns.
3. American Governance & Management:
To be fully compliant, the new TikTok U.S. board of directors must be all Americans. The CEO, CTO, and other key officers are also U.S.-based, U.S. citizens or permanent residents. We write corporate bylaws so that no foreign-owned entity or person can direct content moderation, data policies, or business strategy in the U.S.
If ByteDance tries to influence decisions behind the scenes, we include “poison pill” clauses that automatically strip its remaining rights. This creates a powerful deterrent against any hidden manipulations.
4. Licensing the Algorithm, Not Selling It:
China won’t allow ByteDance to simply sell the recommendation algorithm. If we tried to “buy” the algorithm outright, China’s export laws could block it. The solution: ByteDance grants a long-term, exclusive license to TikTok U.S. This means TikTok U.S. can use the algorithm just as before—same great user experience—but never sees the actual source code.
ByteDance provides the algorithm as a pre-compiled “black-box” package. Think of it like a sealed engine you can install and tweak from the outside (adjusting settings), but you can’t take it apart to learn how it works inside. TikTok U.S. can fine-tune parameters (decide what kind of content to prioritize) but can’t access the raw instructions.
5. Strict Protections Against Code Access:
We must ensure neither ByteDance nor U.S. engineers try something shady with the code. The algorithm updates go through a neutral escrow service. The escrow checks for malicious code or secret data channels before handing the compiled (non-human-readable) binary over to TikTok U.S.
As for U.S. engineers, we impose strict rules: no reverse-engineering, no trying to peek inside the code. Security logs and automated alerts watch for suspicious activity. Any attempt to break into the code results in immediate firing, heavy penalties, and possibly losing the algorithm license. This satisfies ByteDance’s fears about losing its IP and ensures the algorithm remains secure.
6. Data Localization & Security Measures:
Another major U.S. concern is data. We keep all U.S. user data on U.S. soil. No foreign servers, no data pipelines leading back to China. We appoint a Data Security Officer who reports directly to the U.S. board, ensuring user info stays private and protected under U.S. law. This step eliminates the fear that foreign adversaries could use TikTok to spy on Americans.
7. Independent Audits & Transparency:
Words are cheap. We need proof. Enter the independent auditing firm—an American cybersecurity company vetted and approved by U.S. regulators. They’ll do quarterly audits to confirm all these rules are being followed.
The auditor checks three main things:
- Algorithm Integrity: Is the code we’re running exactly what came from the escrow? No hidden backdoors? No sign of anyone (foreign or American) trying to access the source?
- Data Security: Is all user data still in the U.S.? No unauthorized transfers abroad?
- Ownership & Control: Is ByteDance’s stake still below 20%? Are decisions being made only by Americans?
The auditor reports to both U.S. regulators and the TikTok U.S. board, and provides a public summary so users and investors trust the process.
8. Working with U.S. & Chinese Authorities:
We won’t spring this on regulators last minute. We submit the plan to U.S. agencies like CFIUS (Committee on Foreign Investment in the U.S.) for pre-approval. If they want tweaks, we incorporate them. ByteDance also informs Chinese authorities about the licensing arrangement, ensuring it aligns with Chinese export laws. By being proactive, we reduce the chances of political or legal surprises.
9. Start with Private Investment, Move Toward a Public Offering:
Initially, it’s simpler to have a small group of major U.S. investors like Project Liberty buy the majority stake, rather than going public right away. This speeds up compliance and stabilizes the structure.
Later, once everything is running smoothly and regulators are happy, TikTok U.S. can go public on a U.S. stock exchange. This step would allow ordinary Americans—including loyal TikTok users—to buy shares, earn dividends, and share in the company’s financial success. It makes the platform not just American-controlled but also broadly American-owned.
Why This Works for Everyone
-
U.S. Government & Regulators:
They want to ensure no foreign adversary controls TikTok and that American user data isn’t being misused. This plan places the platform under U.S. majority ownership, U.S. control, and continuous oversight. Independent audits and strict security measures give them confidence that the app is safe. -
ByteDance & China:
ByteDance doesn’t lose its crown jewel: the algorithm remains its IP, protected by licensing. China’s concern that selling the IP might violate their laws is addressed—no sale, just a license. ByteDance still earns money from its minority stake but can’t micromanage TikTok U.S. -
American Investors & the Public:
Americans secure majority ownership, satisfying the law’s requirement. Eventually, a public offering lets regular Americans invest in TikTok U.S., share in its profits, and have a voice—no longer just consumers, but also stakeholders. -
TikTok Users:
The app you love doesn’t vanish. The algorithm’s magic stays the same. Data stays safe at home. Transparency from audits assures you that your trust isn’t misplaced. If eventually you can own a piece of the platform, that deepens the sense of community and trust.
Conclusion
This plan ensures that TikTok doesn’t become collateral damage in geopolitical tech struggles. By smartly restructuring, licensing the algorithm instead of selling it, keeping ByteDance as a small, silent partner, and embedding independent audits and strong data security measures, we satisfy U.S. legislative requirements and Chinese restrictions simultaneously.
Over time, opening the company to public investment creates a uniquely American social media powerhouse rooted in trust, transparency, and mutual benefit. It’s a stable, forward-looking solution that lets TikTok continue to thrive in the U.S. while giving everyone—regulators, investors, users, and even ByteDance—a stake in its ongoing success.
I also drafted a sample legal agreement that could be used as a starting point for negotiations that encompass the details outlined in my blog post:
MASTER RESTRUCTURING AND COMPLIANCE AGREEMENT
This MASTER RESTRUCTURING AND COMPLIANCE AGREEMENT (“Agreement”) is made as of [●], 2024 (the “Effective Date”) by and among:
- ByteDance Ltd., a [People’s Republic of China] company (“ByteDance”);
- TikTok U.S. Holdings, Inc., a Delaware corporation (“TikTok U.S.” or “U.S. Entity”);
- Project Liberty U.S. Investors LLC, a U.S. limited liability company representing the initial group of American investors, and any additional U.S. investors listed in Schedule A (collectively, the “U.S. Investors”); and
- Any other Parties identified in the exhibits (collectively, the “Parties”).
RECITALS:
A. ByteDance currently owns and controls the global TikTok platform. Due to recent U.S. legislation (the “Act”), applications that are “foreign adversary controlled” may be banned in the United States. “Foreign adversary controlled” includes entities where a foreign adversary owns at least twenty percent (20%) or exerts operational control.
B. ByteDance is considered a foreign adversary entity under the Act, raising concerns regarding TikTok’s U.S. operations.
C. The Parties desire to restructure TikTok’s U.S. operations into a U.S.-controlled entity, reduce ByteDance’s stake below twenty percent (20%), ensure no foreign operational control, protect U.S. user data, and license—rather than sell—the TikTok recommendation algorithm to comply with both U.S. and Chinese laws.
D. The People’s Republic of China’s regulations restrict the direct sale of certain technologies. Licensing the algorithm will enable TikTok U.S. to operate effectively without transferring IP ownership.
E. U.S. Investors, such as Project Liberty, are willing to provide capital to purchase a controlling interest in TikTok U.S.
F. The Parties agree that independent audits, rigorous compliance measures, and a transparent governance structure are essential to satisfy U.S. regulators, maintain user trust, and protect the intellectual property interests of ByteDance.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1. DEFINITIONS
1.1 “Act” means the U.S. legislation governing foreign adversary controlled applications that may mandate a ban if compliance is not achieved.
1.2 “Algorithm” means the TikTok recommendation algorithm and associated software components, proprietary to ByteDance, which shall be licensed but not sold to TikTok U.S.
1.3 “Auditor” means an independent, U.S.-based cybersecurity and compliance firm approved by relevant U.S. regulatory authorities, retained under Section 7.
1.4 “Escrow Service” means a neutral third-party technology escrow agent responsible for receiving compiled Algorithm updates, verifying integrity, and releasing them to TikTok U.S., as outlined in Section 4.4.
1.5 “Qualified Divestiture” means the transaction resulting in ByteDance’s ownership in TikTok U.S. being reduced below 20%, in accordance with the Act, as described in Section 2.
1.6 “Source Code” means the human-readable form of the Algorithm’s underlying software, which remains exclusively under ByteDance’s control and shall not be disclosed to TikTok U.S.
2. CORPORATE RESTRUCTURING
2.1 Formation of TikTok U.S.:
TikTok U.S. is incorporated as a Delaware corporation to own and operate all U.S. TikTok operations. Within [30] days of the Effective Date, ByteDance shall transfer all U.S.-based TikTok assets, including servers, user data, staff, and operational contracts, into TikTok U.S.
2.2 Ownership Structure:
(a) ByteDance shall sell and/or dilute its interest in TikTok U.S. such that ByteDance holds no more than nineteen percent (19%) of TikTok U.S. shares post-restructuring.
(b) U.S. Investors shall collectively own at least eighty-one percent (81%) of TikTok U.S. shares, ensuring no foreign adversary control.
(c) ByteDance shall hold only passive shares, with no enhanced voting rights, no veto powers, and no board seats.
2.3 Governance:
(a) TikTok U.S. shall be managed by a board of directors composed exclusively of U.S. persons with no allegiance or contractual ties to foreign adversaries.
(b) Key officers (CEO, CTO, CISO) shall be U.S. citizens or permanent residents.
(c) Corporate bylaws shall prohibit ByteDance or any foreign entity from influencing policy decisions, content moderation, or data handling.
(d) If ByteDance attempts to exert influence, “poison pill” provisions trigger automatic dilution or forfeiture of ByteDance’s remaining rights.
3. DATA LOCALIZATION AND SECURITY
3.1 U.S. Data Storage:
All U.S. user data shall be stored solely on servers located within the U.S., controlled by TikTok U.S. employees only.
3.2 No Foreign Data Transfers:
No U.S. user data shall be transmitted, duplicated, or shared with ByteDance or any foreign entity, except as required by U.S. law.
3.3 Data Security Officer (DSO):
TikTok U.S. shall appoint a DSO who reports directly to the board, responsible for enforcing stringent data protection measures, access controls, encryption, and compliance with U.S. privacy laws.
4. ALGORITHM LICENSING AND PROTECTION OF IP
4.1 License Grant:
ByteDance grants TikTok U.S. a perpetual, exclusive, royalty-bearing license to use the Algorithm in compiled, executable form within U.S. operations. No ownership rights in the Algorithm are transferred.
4.2 No Source Code Disclosure:
TikTok U.S. shall not receive or access the Source Code. ByteDance retains full ownership and control of the Source Code.
4.3 Parameter Tuning Interface:
TikTok U.S. may adjust Algorithm parameters (e.g., content weighting) via a ByteDance-approved interface that does not reveal proprietary code logic.
4.4 Escrow Process for Updates:
All Algorithm updates from ByteDance shall be delivered to the Escrow Service. The Escrow Service verifies code integrity and ensures no malicious functionalities. Upon verification, the Escrow Service releases the compiled update to TikTok U.S.
4.5 Anti-Reverse Engineering Measures:
(a) TikTok U.S. employees are strictly prohibited from attempting to decompile, reverse-engineer, or derive Source Code.
(b) Network and system logs shall monitor attempts to access or debug compiled binaries. Suspicious activities shall trigger immediate alerts to the Auditor and TikTok U.S. compliance officers.
(c) Any violation results in immediate termination of responsible personnel, potential suspension of the Algorithm license by ByteDance, and legal liability for damages.
5. ENSURING NO FOREIGN OR UNAUTHORIZED DOMESTIC CONTROL
5.1 Foreign Influence Prohibition:
ByteDance shall have no board representation, no veto powers, and no role in appointing or removing U.S. Entity officers. Any attempt to influence U.S. operations or policies is strictly forbidden.
5.2 American Operational Control:
All strategic decisions, content moderation policies, and data-handling procedures reside solely with U.S. directors and officers.
5.3 Ownership Threshold Maintenance:
ByteDance shall maintain its stake below 20%. Any share purchases, reorganizations, or transactions that would increase ByteDance’s holding above 20% are void and unenforceable.
6. INVESTORS AND FUTURE PUBLIC OFFERING
6.1 Initial Private Investment:
U.S. Investors, led by Project Liberty, shall acquire the majority stake in TikTok U.S. at closing. This ensures immediate compliance and a stable governance structure.
6.2 Potential Public Offering:
After regulatory approvals and operational stabilization, TikTok U.S. may consider a public listing on a U.S. stock exchange. This would allow American citizens, including TikTok users, to purchase shares and potentially receive dividends. The timing and conditions of an IPO shall be determined by the TikTok U.S. board, subject to regulatory consent.
7. INDEPENDENT AUDITS AND REGULATORY ENGAGEMENT
7.1 Auditor Appointment:
TikTok U.S. shall retain a U.S.-based auditing firm with expertise in cybersecurity, software integrity, and data protection. The Auditor is approved by relevant U.S. regulatory authorities (e.g., CFIUS).
7.2 Scope of Audits:
Quarterly audits shall verify:
(a) Algorithm integrity: Confirm compiled code matches the version received from the Escrow Service, detect malicious code, ensure no reverse-engineering attempts succeeded.
(b) Data security: Confirm U.S. user data remains on U.S. soil, with no unauthorized foreign data transfers.
(c) Ownership and governance compliance: Confirm ByteDance’s stake below 20%, no foreign control exerted, and all key decisions made in the U.S.
7.3 Audit Reports:
The Auditor provides detailed reports to U.S. regulators, TikTok U.S. board, and a summarized public report. If material violations occur, the Auditor immediately notifies relevant U.S. authorities and TikTok U.S.
7.4 Regulator Communication:
TikTok U.S. shall proactively engage with U.S. regulators, incorporate their feedback into compliance protocols, and promptly address any identified deficiencies.
7.5 Chinese Regulatory Compliance:
ByteDance shall coordinate with Chinese authorities to confirm that the licensing arrangement complies with Chinese technology export regulations. Any required adjustments shall be made without undermining the Agreement’s objectives.
8. ENFORCEMENT AND REMEDIES
8.1 Breach by ByteDance:
If ByteDance attempts operational control, violates the ownership limit, or influences U.S. decisions, TikTok U.S. may invoke the “poison pill” provisions and seek injunctive relief in U.S. courts.
8.2 Breach by TikTok U.S.:
If TikTok U.S. attempts to access Source Code or reverse-engineer the Algorithm, ByteDance may suspend the license, and the Auditor and regulators shall be notified. TikTok U.S. must immediately remedy the breach and may face financial penalties and legal action.
8.3 Government Orders:
If a U.S. regulatory body mandates further changes, the Parties shall negotiate in good faith to implement such changes. If compliance is impossible, the U.S. government’s order shall prevail.
9. TERM AND TERMINATION
9.1 Term:
This Agreement is effective upon execution and continues indefinitely unless terminated by mutual written consent or as otherwise provided herein.
9.2 Termination for Cause:
Either Party may terminate for material breach that remains uncured after a 30-day notice period. The U.S. government’s final, non-appealable order requiring termination shall also be grounds for ending this Agreement.
9.3 Effect of Termination:
On termination, all licensed rights revert to ByteDance. TikTok U.S. shall cease using the Algorithm. Data-handling obligations and confidentiality duties survive as necessary to protect user privacy and IP rights.
10. GOVERNING LAW AND DISPUTE RESOLUTION
10.1 Governing Law:
Delaware and applicable U.S. federal law govern this Agreement, without regard to conflict-of-law principles.
10.2 Arbitration:
Except for seeking injunctive relief, any dispute arising hereunder shall be settled by arbitration in Washington, D.C., under the AAA rules. The arbitrators’ decision shall be final and enforceable in any court of competent jurisdiction.
11. MISCELLANEOUS
11.1 Entire Agreement:
This Agreement, including all schedules and exhibits, constitutes the entire understanding among the Parties and supersedes all prior discussions.
11.2 Amendments:
No amendment is valid unless in writing and signed by all Parties and, where relevant, approved by U.S. regulators.
11.3 Severability:
If any provision is invalid, the remainder of the Agreement remains in force to the extent the essential purpose is preserved.
11.4 Confidentiality:
Except for public reports required by Section 7, the Parties maintain confidentiality of sensitive terms and non-public findings.
11.5 Assignment:
No Party may assign this Agreement without written consent of the others and approval of U.S. regulators, if required.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date:
ByteDance Ltd.
By: ____________________
Name:
Title:
TikTok U.S. Holdings, Inc.
By: ____________________
Name:
Title:
Project Liberty U.S. Investors LLC (on behalf of U.S. Investors)
By: ____________________
Name:
Title:
(Additional U.S. Investors listed in Schedule A)
EXHIBITS & SCHEDULES:
- Schedule A: List of U.S. Investors and Ownership Percentages
- Exhibit 1: Technical Specifications for Algorithm Parameter Interface
- Exhibit 2: Auditor Scope of Work and Qualifications
- Exhibit 3: Escrow Service Agreement Terms
