In a decisive move that could reshape the future of one of the world’s most popular apps, TikTok has secured a new U.S. ownership structure that keeps the platform alive while addressing national‑security concerns.
Agreements and Ownership Structure
TikTok has signed binding agreements with a consortium of investors that includes Oracle, Silver Lake and the Emirati investment firm MGX. The deal, expected to close on Jan. 22, was confirmed in an internal memo that The Associated Press and NBC News obtained. CEO Shou Zi Chew addressed employees in the memo, writing: “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,” Chew added. He continued, “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.”
Ownership of the new U.S. joint venture will be split as follows: half of the venture will be owned by the investor group, with each of Oracle, Silver Lake and MGX holding a 15 % share. ByteDance itself will own 19.9 % of the venture, while 30.1 % will be held by affiliates of existing ByteDance investors. The memo did not disclose the identities of any other investors, and both TikTok and the White House declined to comment.
Governance, Data Protection and Algorithm Controls
The U.S. venture will feature a seven‑member majority‑American board of directors, as stated in the memo. It will operate under terms that “protect Americans’ data and U.S. national security.” U.S. user data will be stored locally in a system run by Oracle, and the memo assured employees that U.S. users will continue “enjoying the same experience as today”. Advertisers will also continue to serve global audiences with no impact from the deal.
The memo emphasized that TikTok’s algorithm—”the secret sauce that powers its addictive video feed”—will be retrained on U.S. user data to “ensure the content feed is free from outside manipulation.” The new venture will also oversee content moderation and policies within the country, further aligning the platform with U.S. regulatory expectations.
Political Context and Timeline
American officials have long warned that ByteDance’s algorithm is vulnerable to manipulation by Chinese authorities. The algorithm has been a central issue in the security debate over TikTok. China previously maintained that the algorithm must remain under Chinese control by law, but the U.S. regulation passed with bipartisan support stipulated that any divestment of TikTok must sever the platform’s ties—specifically the algorithm—with ByteDance.
The deal marks the end of years of uncertainty about TikTok’s fate in the United States. After Congress passed a law that would ban TikTok in the U.S. if it did not find a new owner by the Jan. 2025 deadline, the platform was set to go dark. For several hours it did, but on his first day in office, President Donald Trump signed an executive order to keep it running while his administration sought a sale. Three more executive orders followed: a second in April when White House officials believed a U.S.‑owned spin‑off was near but fell apart after China backed out following Trump’s tariff announcement; a third in June; and another in September, which Trump said would allow TikTok to continue operating in a manner that meets national‑security concerns.
User Base and Market Impact
TikTok currently has more than 170 million users in the U.S. A Pew Research Center report published 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.
The announcement also triggered a market reaction: shares of Oracle jumped $9.07, or 5 %, to $189.10 in after‑hours trading.
Key Takeaways
- TikTok has secured a new U.S. joint venture led by Oracle, Silver Lake and MGX, closing on Jan. 22.
- The venture will have a majority‑American board and will store U.S. data locally while retraining its algorithm on U.S. user data.
- The deal resolves years of uncertainty following a U.S. law that could have banned TikTok if a new owner was not found by Jan. 2025.
The agreements ensure TikTok can continue to operate in the United States, addressing national‑security concerns while preserving the user experience and protecting data. This development marks a significant milestone in the ongoing debate over the platform’s ownership and governance.
