TikTok’s parent company, ByteDance, has signed binding agreements to form a new joint venture for the app’s U.S. operations with a consortium of investors including Oracle, Silver Lake, and Abu Dhabi’s MGX. The deal, set to close on January 22, resolves the long-standing regulatory threat that could have banned the app in the United States.
According to an internal memo from ByteDance CEO Shou Zi Chew, the ownership of the new U.S. entity will be structured to give outside investors majority control. Oracle, Silver Lake, and MGX will each hold a 15% stake. ByteDance will retain 19.9%, with another 30.1% going to affiliates of existing ByteDance investors. A final 5% will be held by other unnamed parties, bringing total external ownership to 50%.
The agreement follows the U.S. “divest-or-ban” law, which required TikTok to sell its U.S. business. To address national security concerns, all U.S. user data will be stored domestically within Oracle systems. Furthermore, TikTok plans to retrain its core recommendation algorithm using only U.S. user data to ensure the content feed is managed independently.
The deal values TikTok’s U.S. operations at an estimated $14 billion. The new entity will be governed by a seven-member board with an American majority and will oversee all U.S. content moderation and operations.
This resolution concludes years of intense regulatory scrutiny and allows TikTok to continue serving its approximately 170 million American users. In a memo to staff, CEO Shou Zi Chew stated the focus remains on “delivering for our users, creators, businesses and the global TikTok community.”
