TikTok signs deal to house US operations in new joint venture with Oracle, Silver Lake & MGX

ByteDance's TikTok has signed a deal to place its US operations under a new joint venture, TikTok USDS Joint Venture LLC, CEO Shou Zi Chew said in a memo to employees on Thursday, adding that agreements have been finalised with three managing investors — Oracle, Silver Lake and Abu Dhabi-based MGX, as reported by Axios.

The new entity, to be called TikTok USDS Joint Venture LLC, will formally take charge of TikTok’s US business following a deal scheduled to close on 22 January, according to the internal memo.

What is the structure of the new joint venture of TikTok and US?

Under the agreement, a consortium of new investors — Oracle, Silver Lake and Abu Dhabi-based MGX — will collectively hold 50% of the US joint venture, with each of the three firms owning 15%, according to the report by Axios, citing the internal memo.

Another 30.1% of TikTok's shares will be held by affiliates of certain existing ByteDance investors, while TikTok’s China-based parent company, ByteDance, will retain a 19.9% stake, according to the memo.

Chew said in his memo that the new entity would be “majority owned by American investors, governed by a new seven-member majority-American board of directors, and subject to terms that protect Americans’ data and U.S. national security.”

Why does TikTok's US deal matter?

The transaction addresses the requirements of US national security legislation upheld by the Supreme Court in January, which mandated that ByteDance divest TikTok’s US operations or face an effective ban.

In September, US President Donald Trump signed an executive order approving a framework for a deal that would allow TikTok to continue operating in the US, fulfilling a law originally signed by former President Joe Biden.

The agreement is widely seen as bringing closure to a prolonged political and legal saga that began in 2020, when Donald Trump first issued an executive order demanding the sale of TikTok’s US business. Congress later passed legislation in 2024 threatening a nationwide ban unless ByteDance sold the app to domestic owners.

Who will control TikTok's data and security in US?

According to the memo, the TikTok US joint venture will assume responsibility for protecting US user data, securing TikTok’s recommendation algorithm, content moderation, and software assurance.

Chew said the entity will “have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”

Oracle will play a central role beyond its investment. The technology firm will act as the joint venture’s “trusted security partner”, tasked with auditing and validating compliance with “agreed upon National Security Terms”. Sensitive US data will be stored exclusively in Oracle’s US-based cloud computing data centres, Chew wrote.

How will the TikTok algorithm be handled in US?

A key feature of the agreement is the plan to retrain TikTok’s core recommendation algorithm using US user data.

The memo states that the new entity will be responsible for retraining the system “to ensure the content feed is free from outside manipulation”, a move aimed at addressing long-standing concerns among US lawmakers about foreign influence.

What happens next in TikTok US deal?

Once completed, the deal will place TikTok’s US operations under American oversight while allowing the platform to continue serving its millions of users nationwide.