New Joint‑Venture Structure
TikTok has signed binding agreements with Oracle, Silver Lake and the Emirati investment firm MGX to form a new TikTok U.S. joint‑venture. The deal, expected to close on Jan. 22, will allow the popular social video platform to continue operating in the United States.
- Half of the new joint‑venture will be owned by a group of investors, among them Oracle, Silver Lake and MGX. Each of those investors will hold a 15% share.
- ByteDance itself will hold 19.9% of the new app.
- Affiliates of existing ByteDance investors will hold another 30.1%.
- The memo did not disclose the identities of any other investors.
The U.S. venture will be governed by a new seven‑member majority‑American board of directors. The board will operate under terms that “protect Americans’ data and U.S. national security.”
U.S. user data will be stored locally in a system run by Oracle. TikTok’s algorithm will be retrained on U.S. user data to “ensure the content feed is free from outside manipulation.” The venture will also oversee content moderation and policies within the country.
Memo and CEO Message
An internal memo seen by the Associated Press and NBC News confirmed that ByteDance and TikTok had signed the agreements with the consortium. In the memo, CEO Shou Zi Chew addressed employees:
> “I want to take this opportunity to thank you for your continued dedication and tireless work. Your efforts keep us operating at the highest level and will ensure that TikTok continues to grow and thrive in the U.S. and around the world,” Chew wrote. “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.”
Security and Data Protection
American officials have long warned that ByteDance’s algorithm is vulnerable to manipulation by Chinese authorities. The algorithm has been a central issue in the security debate over TikTok.
China has maintained that the algorithm must remain under Chinese control by law. However, a U.S. regulation passed with bipartisan support requires that any divestment of TikTok must mean the platform cuts ties—specifically the algorithm—with ByteDance.
The new joint‑venture structure addresses these concerns by ensuring that the algorithm is retrained on U.S. data and that U.S. user data is stored locally, thereby reducing the risk of external manipulation.
Background: Regulatory and Executive Orders
The deal marks the end of years of uncertainty about TikTok’s fate in the United States. After bipartisan majorities in Congress passed—and President Joe Biden signed—a law that would ban TikTok in the U.S. if it did not find a new owner by the January 2025 deadline, the platform was set to go dark. For several hours, it did.
On his first day in office, President Donald Trump signed an executive order to keep TikTok running while his administration sought a sale. Three additional executive orders followed:
- April – White House officials believed they were nearing a deal to spin off TikTok into a new company with U.S. ownership, but the deal fell apart after China backed out following Trump’s tariff announcement.
- June – Another executive order extended the deadline.
- September – Trump said the order would allow TikTok to continue operating in the U.S. in a way that meets national security concerns.
These orders, combined with the new joint‑venture agreement, have ensured that TikTok can operate in the United States while meeting U.S. data and security requirements.
User Impact and Market Presence
TikTok currently has more than 170 million users in the United States. According to a Pew Research Center report published this fall, about 43 % of U.S. adults under the age of 30 say they regularly get news from TikTok—higher than any other social media app, including YouTube, Facebook and Instagram.
Key Takeaways
- TikTok’s new U.S. joint‑venture, led by Oracle, Silver Lake and MGX, will close on Jan. 22.
- The venture will own 50 % of the company, with ByteDance holding 19.9 % and affiliates holding 30.1 %.
- U.S. data will be stored locally and the algorithm retrained on U.S. user data to protect against external manipulation.
The agreement resolves long‑standing concerns about TikTok’s ownership and data security, ensuring the platform remains available to its vast U.S. user base while meeting national security requirements.
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