TikTok’s Chinese owner, ByteDance, announced Thursday that it has signed binding agreements with three major investors to create a U.S. joint venture to operate the TikTok app. The move, led by American and global investors, aims to prevent a U.S. government ban and marks a key step toward resolving years of regulatory uncertainty, reports Reuters.
The deal comes after years of scrutiny that began in August 2020, when former President Donald Trump first attempted, unsuccessfully, to ban the app. Details largely mirror an agreement announced in September, following Trump’s delayed enforcement of a law requiring ByteDance to divest TikTok’s U.S. assets unless certain conditions were met.
“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community,” TikTok CEO Shou Zi Chew said in a memo to employees seen by Reuters.
Under the deal, American and global investors will hold an 80.1% stake, while ByteDance retains 19.9%. The joint venture will operate independently, controlling U.S. data protection, algorithm security, content moderation, and software assurance. TikTok global’s U.S. entities will still manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing.
The joint venture, named TikTok USDS Joint Venture LLC, will be managed by three investors: Oracle, Silver Lake, and Abu Dhabi-based MGX. These partners will collectively hold 45% of the entity. Oracle will act as the “trusted security partner,” responsible for auditing and safeguarding sensitive U.S. user data stored in the U.S.
The deal, expected to be finalized by January 22, would end long-standing efforts to force ByteDance to divest its U.S. business over national security concerns. Republican Representative John Moolenaar, chair of the House Select Committee on China, previously announced plans to host leadership from the new entity at a 2026 hearing.
Despite broad support for the deal, some lawmakers expressed concerns. Democratic Senator Elizabeth Warren criticized the arrangement, tweeting that “Americans deserve to know if the president struck another backdoor deal for this billionaire takeover of TikTok.”
The U.S. joint venture ownership is structured as follows: 50% by a consortium of new investors (Oracle, Silver Lake, MGX), 30.1% by affiliates of existing ByteDance investors, and 19.9% retained by ByteDance.
A 2024 U.S. law required TikTok to stop operating by January 19 unless ByteDance completed the divestiture. The agreement ensures that U.S. authorities and the joint venture will control the algorithm, which will be monitored and retrained under the oversight of U.S. security partners.
Craig Huber, analyst at Huber Research Partners, said the deal is unlikely to face regulatory hurdles. “At this stage, I see no regulatory issues, particularly given the federal government and President Trump were very involved in putting the whole sale together from the beginning,” he said.
This agreement represents a major milestone for TikTok, which is used regularly by over 170 million Americans, and could signal a new chapter in U.S.-China tech relations.
Bd-pratidin English/ Jisan
