TikTok U.S. Deal With Oracle, Silver Lake to Close in January
▼ Summary
– TikTok has formed a new U.S. joint venture with investors Oracle, Silver Lake, and MGX to comply with U.S. law, with the deal set to close on January 22, 2026.
– The ownership structure gives 50% to the new investor consortium, 30.1% to existing ByteDance investors, and 19.9% to ByteDance, ensuring majority U.S. control.
– This agreement addresses U.S. national security concerns by creating a majority-American board and implementing terms to protect American user data.
– A key requirement is that the new U.S. entity must retrain the app’s content algorithm on U.S. data to prevent outside manipulation.
– The joint venture will also encompass other ByteDance apps like Lemon8 and CapCut, and Oracle will serve as the trusted security partner for data storage and compliance.
The long-running saga surrounding TikTok’s operations in the United States is approaching a definitive resolution. TikTok and its parent company ByteDance have finalized binding agreements with a consortium of investors to establish a new U.S.-based joint venture. This move directly addresses the “divest-or-ban” legislation passed by Congress, which mandated a change in ownership due to national security concerns linked to ByteDance’s Chinese origins. The newly formed entity, TikTok USDS Joint Venture LLC, is scheduled to officially commence operations on January 22, 2026.
According to an internal memo from CEO Shou Zi Chew, the ownership structure of the joint venture has been clearly defined. A consortium of new investors, Oracle, private equity firm Silver Lake, and Abu Dhabi’s state-owned MGX, will collectively hold a 50% stake, with each entity owning 15%. Affiliates of certain existing ByteDance investors will control 30.1%, while ByteDance itself will retain a 19.9% ownership share. This arrangement ensures the venture is majority-owned by U.S. investors, a key requirement of the law.
The agreement stems from a law enacted with strong bipartisan support, which took effect in January 2025. The legislation prohibited the distribution of any app in the U.S. that is more than 20% owned by a “foreign adversary,” citing risks of data espionage and content manipulation. President Trump issued several executive orders delaying enforcement while his administration worked to broker a deal transferring ownership to U.S.-based interests. A final order signed on September 25, 2025, approved the formation of this specific joint venture.
Crucially, the new entity will be governed by a seven-member board with a majority of American directors. Its mandate includes implementing robust measures designed to protect American user data and safeguard national security. A central component of this plan involves the retraining of TikTok’s content-recommendation algorithm exclusively on U.S. user data. This step is intended to insulate the content feed from any potential external manipulation, directly addressing a core concern of U.S. lawmakers.
The joint venture’s responsibilities will extend beyond the core TikTok app. As outlined in the executive order, it will also encompass ByteDance’s other applications, Lemon8 and CapCut, within the United States. Oracle, which already provides cloud services for TikTok’s U.S. operations, will serve as the trusted security partner, responsible for auditing compliance with the national security terms. The administration’s non-enforcement of the ban has been extended to January 23, 2026, providing a pathway for the deal to close.
In his communication to staff, CEO Shou Zi Chew expressed gratitude for their work during the prolonged period of legal uncertainty. He emphasized that the agreements will allow the platform’s over 170 million American users to continue their experience without disruption. The venture is valued at approximately $14 billion according to U.S. officials. While President Trump has suggested other high-profile investors like Michael Dell and Rupert Murdoch are involved, their participation has not been independently confirmed. The completion of this deal aims to settle the contentious debate over the app’s future, allowing it to continue operating as a staple of American social media under a new, U.S.-led corporate structure.
(Source: Variety)
