TikTok’s Chinese owner ByteDance has inked binding agreements to form a joint venture with American and global investors, a move designed to comply with U.S. law and prevent a ban on the popular social media app. The deal, announced to employees by CEO Shou Zi Chew on Thursday, involves major stakes for Oracle, Silver Lake, and Abu Dhabi-based MGX, and is scheduled to close on January 22, 2026.
Under the agreement, ByteDance will retain 19.9 percent of the U.S. operations, the maximum allowed for a Chinese entity under the terms of the legislation. Oracle, Silver Lake, and MGX will each hold 15 percent, while affiliates of existing ByteDance investors will control the remaining 30.1 percent. This structure aims to address longstanding concerns in Washington that Chinese ownership could allow Beijing to access American user data or manipulate content through TikTok’s algorithm.
The joint venture is a direct response to a law passed during the Biden administration in April 2024, which mandated that ByteDance divest TikTok’s U.S. operations or face a ban. Enforcement has been repeatedly delayed by executive orders from President Donald Trump, who has worked to broker a deal that reduces Chinese influence while keeping the app operational. Trump’s administration announced a framework in September, and this week’s signing represents a key step toward implementation.
President Trump has played a central role, having named Oracle co-founder Larry Ellison—a longtime ally—as a key figure in the arrangement. The White House has stated that Oracle will license TikTok’s recommendation algorithm as part of the agreement, intended to ensure it operates free from foreign manipulation. However, some lawmakers, like Senator Ron Wyden, have criticized the deal, arguing it fails to adequately protect American privacy.
For TikTok’s vast user base and business community, the agreement brings relief after years of uncertainty. The app has over 170 million users in the U.S. and supports more than seven million small businesses that rely on it for marketing and sales. Small business owner Tiffany Cianci, with hundreds of thousands of followers, expressed hope that new investors will maintain favorable terms for entrepreneurs, though she reserved judgment on the long-term impact.
A critical component is the algorithm, which will be retrained on American data to prevent external interference. CEO Chew emphasized in a memo that the U.S. joint venture will operate independently, with authority over data protection, algorithm security, and content moderation. This is meant to align with U.S. national security requirements while allowing TikTok Global to manage global product interoperability and commercial activities.
The deal is poised to close next month, ending a protracted saga that has seen multiple deadlines extended. If finalized, it will mark a significant de-escalation in tensions between the U.S. and China over technology and trade. Analysts like Alvin Graylin of MIT suggest the agreement allows both countries to claim a win, with Beijing permitting the structure as a calibrated move rather than capitulation.
Looking ahead, the success of the joint venture will depend on effective implementation and ongoing scrutiny from regulators. While it averts an immediate ban, questions remain about long-term data security and the app’s role in U.S.-China relations. For now, TikTok users can expect continuity, but the deal underscores the complex interplay of technology, politics, and global business in the digital age.
