TikTok has signed an agreement to divest its US entity to a new joint venture controlled by American investors, according to an internal memo reported by Axios on Thursday.
The move marks the end of a years-long saga that began with efforts by Washington to compel TikTok’s Chinese parent company, ByteDance, to sell its American operations over national security concerns.
According to the internal message from CEO Shou Chew, the deal is set to close on January 22. The new entity will be called TikTok USDS Joint Venture LLC. Oracle, Silver Lake, and Abu Dhabi-based MGX will collectively hold 45 percent of the company. Nearly one-third will remain with affiliates of existing ByteDance investors, and just under 20 percent will stay with ByteDance itself.
The US joint venture will take full responsibility for data protection, algorithm security, content moderation, and software assurance, according to Axios. The memo emphasizes that the company will focus on “retraining the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation.”
A “trusted security partner” will audit and validate compliance with National Security Terms, according to the memo. Oracle will assume this role once the transaction is complete.
Before leaving office, former US President Joe Biden signed legislation that would ban TikTok unless ByteDance divested its US assets. President Donald Trump has repeatedly issued executive orders to keep the app operational while negotiations continue.
Trump previously supported a TikTok ban during his first term as President, but later had a change of heart and pledged to “save TikTok” during his presidential campaign ahead of his second term.
Trump credits the popular social media platform with helping him secure support among young voters in his victory over Democrat Kamala Harris in the November 2024 presidential election.