TikTok has revealed that it has entered into a joint venture with a group of investors, enabling the platform to continue its operations in the United States and evade a potential ban due to its Chinese ownership.
The agreement resolves a lengthy impasse regarding the future of the video-sharing app in the largest economy in the world, where TikTok claims to have over 170 million users.
In an internal memo, TikTok’s CEO Shou Chew informed employees that the company, along with its Chinese parent company ByteDance, will establish a new entity based in the US. The deal includes significant investments from Oracle, Silver Lake, and the Abu Dhabi-based firm MGX. Notably, Oracle’s executive chairman Larry Ellison, a longtime supporter of former President Donald Trump, is a key player in this arrangement.
Chew stated in the memo, “The US joint venture will handle US data protection, algorithm security, content moderation, and software assurance.” He added that it will have the exclusive authority to ensure the security of content, software, and data for American users.
According to Chew, half of the new US venture will be owned by a consortium of new investors, with Oracle, Silver Lake, and MGX each holding 15 percent stakes. Affiliates of existing ByteDance investors will control just over 30 percent, while ByteDance will retain just under 20 percent, the maximum ownership allowed for a Chinese company under US law.
The US entities of TikTok Global will manage global product interoperability and certain commercial operations, including e-commerce, advertising, and marketing. Chew mentioned that there is still work to be done before the deal is expected to close on January 22. This agreement follows legislation enacted under former President Joe Biden, which mandated ByteDance to divest TikTok’s US operations or face a ban. US lawmakers have expressed ongoing national security concerns, warning that China could exploit the platform to gather data on Americans or manipulate public opinion through its algorithms.
Initially, Trump advocated for restrictions on TikTok during his first term but has since postponed the enforcement of the law through a series of executive orders, the latest of which extends the deadline to January.
The deal largely aligns with a White House announcement from September, which indicated that a new venture meeting the requirements of the 2024 law had been established.
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Trump remarked at the time, “If I could make it 100 percent MAGA, I would, but it’s not going to work out that way unfortunately.” He also publicly identified Ellison as a key figure in the arrangement.
Ellison has recently gained attention in the political and business arenas due to his connections with Trump, including involvement in significant artificial intelligence partnerships and media acquisitions related to Trump’s family.
China’s foreign ministry did not directly comment on the reported agreement. Spokesman Guo Jiakun reiterated that “China’s position on the TikTok issue is consistent and clear”.
ByteDance did not immediately respond to requests for comment. However, analysts described the deal as a compromise that preserves TikTok’s access to the lucrative US market.
“Keeping the US operation live is itself a victory” for ByteDance, Li Chengdong, founder of Chinese technology consultancy Dolphin, said. Li added that resolving the issue would allow ByteDance to focus on other priorities, including artificial intelligence projects, and could support plans for a future public listing.
Zhang Yi of research firm iiMedia said the US market remains “of paramount importance to TikTok” but cautioned that challenges may persist. “The US side could still leverage its regulatory power… to impose unfair demands on TikTok,” he said.
