TikTok has signed an agreement to create a new U.S.-based joint venture controlled primarily by American investors, marking a major step toward resolving the app’s long-running legal and political uncertainty in the United States.
Deal Aims to Prevent U.S. Ban
The agreement follows a law passed by Congress last year that requires TikTok to be banned nationwide unless its Chinese parent company, ByteDance, divests control of its U.S. operations. The new deal begins the process of complying with that requirement and keeping the platform available to its more than 170 million American users.
Ownership Structure Outlined
According to an internal memo from TikTok CEO Shou Chew, Oracle, Silver Lake and MGX will each own 15% of the new entity. ByteDance will retain a 19.9% stake, while affiliates of existing ByteDance investors will hold the remaining 30.1%. MGX is based in the United Arab Emirates. Oracle and Silver Lake declined to comment on the agreement.
Timeline and Next Steps
Chew said the deal is not yet final and that “there’s more work to be done” ahead of a targeted closing date of Jan. 22, 2026. He described the agreement as a way to allow TikTok to continue operating in the U.S. while addressing government concerns.
Data Security and Governance
The memo states that the U.S. joint venture will be majority-owned by American investors and overseen by a seven-member board with a majority of U.S. directors. The new entity will be responsible for U.S. data protection, algorithm security, content moderation and software assurance.
Oracle will serve as the “trusted security partner,” tasked with auditing and validating compliance with national security requirements once the transaction is completed.
Privacy and Political Concerns
Privacy and free speech experts have raised concerns about the deal, noting Oracle co-founder Larry Ellison’s close ties to President Donald Trump and the Ellison family’s broader influence in media ownership. Critics warn the structure could raise new questions about independence and oversight, even as it addresses national security issues.
Algorithm Oversight
Under a previously announced framework deal between the U.S. and China, a copy of TikTok’s algorithm will be brought into the U.S. joint venture and overseen by Oracle. The arrangement is intended to comply with both U.S. and Chinese laws while safeguarding user data and platform operations.
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