TikTok’s future in the United States has just been secured, as the company signed agreements with Oracle, Silver Lake and MGX to form a new U.S. joint venture that will keep the platform operating under new ownership.
New Joint Venture Structure
The agreement, expected to close on Jan. 22, was revealed in an internal memo seen by The Associated Press. ByteDance and TikTok signed binding agreements with the consortium, which includes Oracle, Silver Lake and the Emirati investment firm MGX. Each of the three investors will hold a 15% share, making up half of the new venture’s ownership.
ByteDance itself will hold 19.9% of the joint venture, while affiliates of existing ByteDance investors will own an additional 30.1%. The memo does not identify other investors, and both TikTok and the White House declined to comment.
Chew wrote in the memo to employees: “I want to take this opportunity to thank you for your continued dedication and tireless work. Your efforts keep us operating at the highest level and will ensure that TikTok continues to grow and thrive in the U.S. and around the world,” and added “With these agreements in place, our focus must stay where it’s always been-firmly on delivering for our users, creators, businesses and the global TikTok community.”
A new seven-member majority-American board of directors will be established, and the venture will be subject to terms designed to “protect Americans’ data and U.S. national security.”
Operational and Security Measures
U.S. user data will be stored locally in a system run by Oracle, ensuring that the data remains within the United States. The memo states that U.S. users will continue “enjoying the same experience as today” and that advertisers will keep serving global audiences without impact from the deal.
TikTok’s algorithm, the core component that powers its video feed, will be retrained on U.S. user data to “ensure the content feed is free from outside manipulation,” the memo said. The U.S. venture will also oversee content moderation and policy enforcement within the country.
American officials have long warned that ByteDance’s algorithm is vulnerable to manipulation by Chinese authorities, who could shape content in ways that are difficult to detect. The algorithm has been a central issue in the security debate over TikTok, and U.S. regulation requires that any divestment cut ties with ByteDance, specifically the algorithm.
Historical Context and Regulatory Journey
The joint venture marks the end of years of uncertainty about TikTok’s fate in the United States. Congress passed a law that would ban the platform if it did not find a new owner by the January 2025 deadline, and the company was set to go dark on that date. For several hours it did, but President Donald Trump signed an executive order on his first day in office to keep TikTok running while his administration sought a sale.
Trump issued three additional executive orders extending the deadline for a TikTok deal. In April, White House officials believed a deal to spin off TikTok into a new U.S.-owned company was near, but it collapsed after China backed out following Trump’s tariff announcement. Subsequent orders in June and September further extended the deadline, with Trump stating that TikTok could continue operating in a manner that meets national security concerns.
User Impact and Market Reaction
TikTok now serves more than 170 million users in the United States. A Pew Research Center report released this fall found that about 43% of U.S. adults under 30 say they regularly get news from TikTok-higher than any other social media app, including YouTube, Facebook and Instagram.
Following the announcement, shares of Oracle rose $9.07, or 5%, to $189.10 in after-hours trading.
Key Takeaways
- TikTok has secured a U.S. joint venture with Oracle, Silver Lake and MGX, closing on Jan. 22.
- The new venture will keep U.S. data stored locally and retrain its algorithm on domestic data.
- The deal ends uncertainty after a January 2025 deadline and follows multiple executive orders extending TikTok’s operation.
The agreement ensures TikTok can continue to serve its vast U.S. user base while addressing national security concerns and maintaining the platform’s user experience.
