TikTok signs deal to form new US unit with investors, including Oracle, Silver Lake

TikTok has secured its future in the United States by finalizing agreements with three major investors to form a new U.S. joint venture. Oracle, Silver Lake, and Emirati investment firm MGX have each signed on for 15% stakes in the new entity, according to an internal memo reviewed by The Associated Press.

The deal, expected to close on January 22, represents the culmination of years of regulatory uncertainty for the popular video-sharing platform, which has over 170 million American users. The new arrangement will allow TikTok to continue operating in the U.S. market while addressing national security concerns that have dogged the platform due to its Chinese ownership.

Under the terms of the agreement, ByteDance, TikTok’s parent company, will retain a 19.9% direct ownership stake in the U.S. venture. Another 30.1% will be held by affiliates of existing ByteDance investors, though their identities were not specified in the memo.

“I want to take this opportunity to thank you for your continued dedication and tireless work,” CEO Shou Zi Chew wrote 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 new entity will feature a seven-member, majority-American board of directors and operate under terms designed to safeguard U.S. user data and national security. Oracle will manage the local storage of American user data, addressing one of the primary concerns raised by U.S. officials.

Of particular significance is the handling of TikTok’s algorithm—the technology that powers its addictive video recommendations. The memo states that the algorithm will be retrained on U.S. user data to “ensure the content feed is free from outside manipulation.” The U.S. venture will also take responsibility for content moderation and policies within the country.

This algorithmic autonomy represents a significant shift, as Chinese law had previously mandated that the algorithm remain under Chinese control. American officials have long warned that ByteDance’s algorithm could be manipulated by Chinese authorities to shape content in subtle ways.

The deal marks the end of a tumultuous period for TikTok in the United States. Earlier this year, Congress passed bipartisan legislation, signed by then-President Biden, that would have banned the platform by January 2025 if it didn’t find a new owner to replace ByteDance.

When President Trump took office, the platform faced an imminent shutdown. However, Trump signed a series of executive orders extending the deadline for a sale while negotiations continued. His intervention came as the app has grown increasingly influential, especially among younger Americans.

According to a recent Pew Research Center report, about 43% of U.S. adults under 30 regularly get news from TikTok—more than from any other social media platform, including YouTube, Facebook, and Instagram. This statistic underscores the platform’s cultural significance and explains why both companies and regulators have been keen to find a solution that keeps TikTok operating in the U.S.

The arrangement promises continuity for users and advertisers. According to the memo, U.S. users will “continue enjoying the same experience as today,” while advertisers will maintain their ability to reach global audiences without disruption.

The market responded positively to the news, with Oracle’s shares jumping $9.07, or 5%, to $189.10 in after-hours trading. As a key technology partner in the deal, Oracle stands to benefit significantly from its role in storing and securing TikTok’s U.S. user data.

Neither TikTok nor the White House provided additional comment on the agreements. The deal’s completion in January will be closely watched as a potential model for how Chinese-owned technology companies might navigate increased scrutiny in the United States while maintaining operational continuity.