In a major strategic move to continue its operations in the United States, TikTok has formally entered into a joint venture agreement with key American and global investors. This deal is designed to comply with a 2024 US law that threatened to ban the popular video-sharing app over concerns related to its Chinese ownership.
The Structure of the TikTok US Joint Venture
According to an internal memo from CEO Shou Zi Chew seen by AFP, TikTok and its parent company ByteDance have agreed to establish a new, US-based entity. This venture is backed by tech giant Oracle, private equity firm Silver Lake, and Abu Dhabi-based investor MGX. The agreement aims to address national security concerns by restructuring TikTok's American operations.
Under the finalized structure, American and global investors will collectively hold just over 80% of the new joint venture. ByteDance will retain a 19.9% stake, which is the maximum ownership permitted for a Chinese company under the US law. Specifically, Oracle, Silver Lake, and MGX will each own 15% of the venture. Affiliates of existing ByteDance investors will hold approximately 30%.
Operational Control and Data Security Measures
Chew emphasized that the US joint venture will function as an independent entity with full authority over critical areas. These include US data protection, algorithm security, content moderation, and software assurance. The venture will have the exclusive right to ensure that content, software, and data for American users are secure.
As reported by Reuters, Oracle will act as TikTok's "trusted security partner." Its responsibilities will involve auditing compliance and safeguarding sensitive US user data. All this data will be stored on Oracle's cloud infrastructure located within the United States. Beyond security, the new entity will also oversee certain commercial functions like advertising, marketing, and e-commerce for the US market.
Political Backdrop and Regulatory Hurdles
This agreement, set to close on January 22, 2026, culminates years of pressure from US lawmakers who feared the app could be leveraged by Beijing to access data or influence public opinion. The deal framework was initially unveiled by the White House in September, and this memo marks TikTok's first formal confirmation of signing on.
US President Donald Trump, who initially pushed for a ban, has since delayed enforcement and publicly backed this new arrangement. He has credited TikTok, which boasts over 170 million US users, with aiding his re-election campaign. Trump has named Oracle founder Larry Ellison, a longtime ally, as a key figure in the deal.
However, the agreement has faced criticism. Democratic Senator Elizabeth Warren has raised unanswered questions, accusing Trump of facilitating a "billionaire takeover" of TikTok. Despite these concerns, analysts suggest the high level of White House involvement in shaping the transaction means it is likely to overcome remaining regulatory hurdles, allowing TikTok to avoid a shutdown in its crucial US market.
