TikTok Reaches Deal to Cede US Operation to American Investors
TikTok has reached a significant agreement to transfer a substantial portion of its US operation to a group of American investors, effectively ending a prolonged dispute with the federal government. The new partnership, dubbed “TikTok USDS Joint Venture LLC,” will see major American investors take control of 45% of the US-based business, while ByteDance, TikTok’s parent company, retains a nearly 20% share.
Details of the Deal
The newly formed investor group includes cloud giant Oracle, tech-focused private equity firm Silverlake, and MGX, an Abu Dhabi-based investment firm focused on AI. This arrangement will grant the investor group significant control over the US-based business, with Oracle set to serve as the trusted security partner responsible for auditing and validating compliance with agreed-upon National Security Terms.
The new entity, TikTok USDS Joint Venture LLC, will oversee the app’s operations, including data protection, algorithm security, content moderation, and software assurance. The deal is expected to be completed by January 22, 2026, as stated in an internal memo from ByteDance CEO Shou Chew.
Background and Context
The US government has long expressed concerns over national security, seeking to separate TikTok’s US-based business from its Chinese parent company, ByteDance. In September, President Trump signed an executive order approving the sale of TikTok’s US operations to an American investor group, with Oracle, Silverlake, and MGX reported to be the primary investors.
Until now, ByteDance had not disclosed details of the deal, except to confirm its intention to comply with US law and ensure TikTok’s continued availability to US users. The agreement marks a significant development in the ongoing saga, with the US government aiming to address perceived national security risks associated with TikTok’s Chinese ownership.
Expert Analysis and Implications
As the deal unfolds, experts will be closely watching the implications for TikTok’s US operations and the broader tech industry. With the new partnership in place, TikTok is likely to face increased scrutiny over its data protection and security practices, as well as its content moderation policies. The involvement of Oracle as a trusted security partner is expected to provide an additional layer of assurance for US regulators and users alike.
As the tech landscape continues to evolve, this deal serves as a reminder of the complex interplay between national security, data protection, and the global tech industry. With the closing date set for January 22, 2026, all eyes will be on TikTok and its new investor group as they navigate the challenges and opportunities ahead.
