TikTok will continue operating in the United States after ByteDance, its Chinese parent company, agreed to spin off the US business into a new joint venture designed to safeguard American data and national security. The move comes after years of uncertainty over the platform’s future in the country.
Under the agreement, TikTok has partnered with three major investors — Oracle, Silver Lake, and Emirati investment firm MGX — to form a new TikTok US joint venture. The deal is set to close on 22 January, according to an internal memo seen by The Associated Press. In the memo, CEO Shou Zi Chew thanked employees for their work and urged them to focus on serving users, creators, businesses, and the global TikTok community.
Half of the new venture will be owned by the consortium of investors, with each holding a 15 percent stake. ByteDance will retain 19.9 percent, while 30.1 percent will be held by affiliates of existing ByteDance investors. The memo did not identify the remaining investors, and both TikTok and the White House declined to comment.
The US-based company will be governed by a seven-member majority-American board and will operate under rules intended to protect American user data. US data will be stored locally in a system managed by Oracle, and the company said users will experience the platform as they do today. Advertisers will also continue to reach global audiences without disruption.
A key aspect of the deal involves TikTok’s algorithm, which determines the content users see. The algorithm will be retrained on US user data to prevent outside manipulation and ensure the content feed remains under US oversight. The venture will also oversee content moderation and policies within the country.
Concerns about the algorithm have been central to debates over national security. US officials have warned that the algorithm could be influenced by Chinese authorities, while Chinese law previously required ByteDance to maintain control over it. The new venture’s structure is intended to sever ties between the algorithm and ByteDance, as required by US legislation.
The agreement ends years of uncertainty about TikTok’s future in the US. In August 2020, the Trump administration attempted to ban the platform due to its Chinese ownership. Subsequent executive orders temporarily allowed TikTok to continue operating while negotiations over a sale or spinoff took place. The process faced multiple delays, including stalled talks after China resisted proposed deals.
TikTok now has more than 170 million users in the US. A recent Pew Research Center report found that 43 percent of American adults under 30 regularly access news through TikTok, surpassing YouTube, Facebook, and Instagram. Following the announcement, Oracle shares rose $9.07 to $189.10 in after-hours trading.
The joint venture marks a major milestone for TikTok, ensuring the app can maintain its presence in the US while meeting regulatory and national security concerns.
