TikTok Inks Deal With Oracle, Silver Lage, & MGX To Form New US Unit

TikTok has reached binding deals with Oracle, Silver Lake and MGX to create a new TikTok U.S. joint venture, securing the short-video app's continued access to the American market. An internal memo seen by The Associated Press said the transaction is expected to close on Jan. 22, subject to final conditions.

In the memo, TikTok CEO Shou Zi Chew told staff that ByteDance and TikTok had now signed agreements with the investor consortium, ending months of tense negotiations. The arrangements come after intense political pressure in Washington, where lawmakers demanded the service separate its U.S. operations from China-based parent company ByteDance.

TikTok U.S. joint venture ownership and governance details

The new TikTok U.S. joint venture will have a split ownership structure involving ByteDance and outside investors. According to the memo, half of the venture will be held by a group of investors that includes Oracle, Silver Lake and Emirati fund MGX, with each of these three taking a 15% stake in the American entity.

ByteDance itself will own 19.9% of the TikTok U.S. joint venture, while a further 30.1% will sit with affiliates of existing ByteDance investors. The memo did not identify those additional backers, and both TikTok and the White House declined to answer questions about their identities or any governance rights they may receive.

The TikTok U.S. joint venture will be overseen by a new board comprising seven directors, with a majority of members drawn from the United States. The memo said this structure, alongside other conditions, is designed to meet requirements that the business operate under terms that "protect Americans' data and U.S. national security."

Data controls and algorithm changes in TikTok U.S. joint venture

A core feature of the TikTok U.S. joint venture plan is strict handling of American user information. Under the arrangement, U.S. data will be stored on domestic servers managed by Oracle. The memo stated that people in the United States will go on "enjoying the same experience as today" despite the ownership change.

The memo added that advertising services will keep reaching users worldwide, and global campaigns should not face disruption because of the TikTok U.S. joint venture. The new American company will also take responsibility for content policies and moderation inside the country, which has been a sensitive area in earlier political debates.

TikTok's recommendation system, often described as a powerful engine for its video feed, will also be reshaped. The memo said the algorithm will be retrained using U.S. user data to "ensure the content feed is free from outside manipulation," addressing long-running concerns in Washington about possible foreign influence over what users see on the app.

TikTok U.S. joint venture background and political context

American officials from both major parties have repeatedly warned that ByteDance's algorithm could be steered by Chinese authorities. Security agencies argued that such control might allow subtle promotion or suppression of content in ways that are hard for outsiders to detect. These fears made the recommendation system central to the broader national security argument against TikTok.

China previously insisted that key technology, including TikTok's algorithm, must stay under Chinese control as a matter of domestic law. However, U.S. legislation that passed with bipartisan backing required any TikTok divestment to break those links. Lawmakers specified that a sale must include separation of the algorithm itself from ByteDance's control.

The TikTok U.S. joint venture announcement follows years of uncertainty over the app's legal status in America. Congress had earlier approved, and President Joe Biden had signed, a law threatening a nationwide ban if the platform failed to secure a new owner to replace ByteDance. The deadline in that law fell in January 2025.

For several hours at that January cutoff, TikTok briefly went offline in the United States. On the same day, President Donald Trump issued an executive order that allowed operations to resume while negotiations over a deal continued. That step began a series of extensions as the White House searched for an arrangement that could satisfy security demands.

Trump later signed three more executive orders tied to a potential transaction, even though legal experts questioned the basis for the repeated delays. The second order came in April, when officials thought they were close to an agreement to spin off TikTok into a U.S.-owned firm. Those talks collapsed after China withdrew support following Trump's tariff announcement.

A third order arrived in June, followed by another in September, both aimed at giving TikTok more time to align with national security conditions while still serving American users. The latest agreement to build the TikTok U.S. joint venture is intended to provide a stable, long-term structure after that series of temporary measures and shifting political positions.

Chew's memo praised staff for maintaining operations during that turbulent period. "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 wrote in the memo to employees. "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."

The company emphasised the app's large American audience during the debate. TikTok now claims more than 170 million users in the United States. Research by the Pew Research Center, released in the autumn, found about 43% of U.S. adults younger than 30 regularly get news on TikTok, a higher share than YouTube, Facebook or Instagram.