Done Deal: TikTok sells US unit to American-led joint venture

After years of legal battles and political pressure, TikTok has signed binding agreements to sell a majority stake in its U.S. operations to a consortium of investors, forming a new, American-controlled joint venture. The deal is intended to comply with U.S. law requiring its Chinese parent company, ByteDance, to divest or face a ban.

TikTok CEO Shou Zi Chew confirmed in an internal memo that agreements were signed with a consortium of investors including Oracle, Silver Lake, and MGX (an Emirati investment firm). The transaction is expected to close on January 22, 2026.

The new ownership structure

The deal creates a new U.S. entity, tentatively named TikTok USDS Joint Venture LLC, which will be majority-owned and governed by American interests:

Oracle, Silver Lake, and MGX each own a 15% stake in the new US joint venture. ByteDance will retain a 19.9% minority, non-controlling stake.

Key governance changes

• Board Control: The new entity will be governed by a seven-member board of directors, with a majority of American members.

• Data Security: U.S. user data will be stored locally on a system run by Oracle, which will also serve as a "trusted security partner" to audit the application's code.

• Algorithm Separation: The crucial content recommendation algorithm will be retrained solely on U.S. user data to eliminate the risk of foreign manipulation, and the new U.S. entity will oversee its security.

Resolving years of uncertainty

The agreement brings an end to a protracted political and legal standoff, which began under the previous administration and was intensified by a law passed by Congress requiring a sale or ban.

While ByteDance retains a stake, the new structure meets the legal requirement for a majority divestiture of approximately 80% of its U.S. assets to non-Chinese investors. The U.S. entity will now be responsible for U.S. data protection, content moderation, and algorithm security, addressing the core national security concerns raised by U.S. officials.

CEO Shou Zi Chew assured employees that the deal will allow the platform to continue serving its more than 170 million U.S. users, promising that users will continue "enjoying the same experience as today."