According to the terms of the agreements, the new investors will hold an 80.1% stake while ByteDance will retain a 19.9% stake upon the divestiture.
TikTok parent company ByteDance has signed binding agreements with three major investors to form a merger that jointly operates TikTok’s US app. This joint venture will be led by US as well as international investors to avert the social media app from being banned. This new venture will be called TikTok USDS Joint Venture LLC, and the three investors are Oracle, Silver Lake, and Abu Dhabi-headquartered MGX.
With over 170 million American users, TikTok has been enveloped by years of uncertainty since President Trump first tried unsuccessfully to ban it back in 2020. The mile marker of a deal is in tune with the April 2024 decision of the Senate to ban the short-video app in the US, unless the Chinese company initiates its divestment.
According to the terms of the agreements, the new investors will hold an 80.1% stake while ByteDance will retain a 19.9% stake upon the divestiture. TikTok CEO Shou Zi Chew said that this new joint venture will be an independent entity that has control over US data protection, algorithm security, content moderation, and software assurance.
He also added that global product interoperability and commercial opportunities like e-commerce, advertising, and marketing will be managed by TikTok Global’s US wing. The deal will take effect on January 22 and is being welcomed after years of efforts to get ByteDance to divest its US business, citing threats to national security.
Republican Representative and Chair, House Select Committee on China, John Moolenaar, has previously said that he would host the new company’s top leadership to a hearing in 2026. Despite trying to ban the app, Trump, who has over 15 million followers on TikTok, has credited the app for his victory in the 2024 Presidential elections. The White House also created an official profile on the video app in August.
According to a memo, 50% of the US joint venture will be held by a consortium of new investors like Oracle, Silver Lake, and MGX, with 15% each; ByteDance will retain 19.9% and the remaining 30.1% will be owned by affiliates of existing ByteDance investors. In September, Trump had identified Michael Dell, Chairman and CEO, Dell Technologies, and Fox News Chairman Rupert Murdoch, among a few other ‘world-class investors’, as those who could be potential partners in the impending deal.
This deal, however, is not free from criticism. Democrat Elizabeth Warren took to the social media site X to point out that there are many unanswered questions about the deal. She said that through this deal, Trump is giving his ‘billionaire buddies’ more control over the content that regular Americans can consume. Warren has called this billionaire takeover of TikTok a ‘backdoor deal’ and has demanded more transparency.
The April 2024 law required TikTok to cease all operations by January 19, 2025, unless ByteDance had completed divesting its US assets. However, when Trump took charge of the Oval Office on January 20, he chose not to enforce it. In September, he announced that TikTok would remain active, but its algorithm would be retrained and monitored by TikTok USDS Joint Venture LLC’s security partners, giving the company until late January 2026 to finalise the deal.
One of the seven board members for the new company will be appointed by ByteDance as part of the deal on TikTok’s US operations, and most of the other seats will be held by Americans. TikTok announced on Thursday that algorithm security, software assurance, content moderation, and US data protection will fall under the purview of the US joint venture.
As the ‘trusted security partner,’ Oracle will be in charge of examining and verifying compliance, which includes safeguarding sensitive US user data, which will be safely stored on a cloud environment in the US run by Oracle.
Despite reservations from certain sects, the deal is likely to receive the necessary regulatory clearances, as Trump himself is heavily involved in orchestrating this deal.
