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TikTok has reached binding agreements with a group of major U.S. and foreign investors to form a new TikTok U.S. joint venture, a move intended to ensure the popular video platform can continue operating in the United States amid years of national security concerns.
The deal, involving Oracle, Silver Lake and the Emirati investment firm MGX, is expected to close early next year. TikTok CEO Shou Zi Chew has confirmed that TikTok and its China-based parent company, ByteDance, have signed the agreements with the investor consortium.
“With these agreements in place, our focus must stay where it’s always been — firmly on delivering for our users, creators, businesses and the global TikTok community,” Chew wrote to employees, thanking them for their work during a prolonged period of uncertainty.
Under the agreement, 50% of the new TikTok U.S. entity will be owned by a group of investors, including Oracle, Silver Lake and MGX, each holding a 15% stake. ByteDance will retain a 19.9% ownership interest, while affiliates of existing ByteDance investors will hold the remaining 30.1%, according to the memo.
The memo did not identify all investors involved.
Governance and data controls
The new U.S. venture will be overseen by a seven-member board of directors, with a majority of American members, according to the memo. The company will operate under terms designed to “protect Americans’ data and U.S. national security.”
U.S. user data will be stored domestically through systems operated by Oracle. TikTok said U.S. users will continue to have the same experience on the app and that advertisers will be able to reach global audiences without disruption.
TikTok’s recommendation algorithm — long at the center of U.S. security concerns — will be retrained using U.S. user data, the memo said, to ensure content recommendations are not subject to outside influence. The U.S. venture will also oversee content moderation and platform policies within the country.
U.S. officials have warned for years that TikTok’s algorithm could be manipulated by Chinese authorities to influence content shown to American users, concerns the company has repeatedly denied.
The algorithm has been a key sticking point in negotiations. China has previously indicated that the technology could not be transferred under its export laws. However, U.S. legislation passed with bipartisan support requires that any divestment of TikTok sever operational ties — including control of the algorithm — from ByteDance.
End of a prolonged standoff
The agreement appears to resolve years of uncertainty over TikTok’s future in the U.S. Congress passed, and President Joe Biden signed, a law that would have banned the app nationwide unless ByteDance divested its U.S. operations. The ban was set to take effect in January 2025, and TikTok briefly went offline for several hours as the deadline approached.
On his first day back in office, President Donald Trump signed an executive order allowing TikTok to continue operating while negotiations continued. That order was followed by three additional extensions, issued despite questions from legal experts about the administration’s authority to delay enforcement of the law.
A previous deal collapsed earlier this year after China withdrew following Trump’s announcement of new tariffs. Subsequent extensions in June and September kept the app running as talks continued.
Trump has said any final arrangement must address U.S. national security concerns while preserving access to the platform for American users.
A major platform for young Americans
TikTok has more than 170 million users in the United States. About 43% of U.S. adults under age 30 say they regularly get news from TikTok — more than from YouTube, Facebook or Instagram — according to a Pew Research Center report published this fall.
The deal, if completed as planned, would place majority ownership and governance of TikTok’s U.S. operations outside of ByteDance’s direct control, a key requirement under U.S. law.
