Breaking News: ByteDance, TikTok’s Chinese parent company, signed binding agreements on Thursday to enter into a joint venture. The agreement will grant ownership of TikTok’s US app to US and international investors. The agreement is major progress towards avoiding a TikTok ban in the US and putting years of uncertainty with regards to the app behind.
The development marks a significant event for the popular short-form video-sharing app, which is commonly utilized by over 170 million Americans. The TikTok wars started in August 2020 when US President Donald Trump sought to ban the app for security reasons, but this effort failed.
Details relate to what Trump had proposed in September in delaying the enforcement of a law that would ban the app if its Chinese owners do not sell it. Trump stated that the agreement was in line with the requirements pertaining to a law of 2024. Trump further delayed the ban on January 20.
American Investors Obtain an 80 Percent Stake
Pursuant to this deal, American and international investors are set to own an 80.1 percent interest in TikTok USDS Joint Venture LLC, while ByteDance generates a 19.9 percent interest.
The American and international investors include Oracle, the cloud computing giant, and private equity firm Silver Lake and MGX, which is headquartered in Abu Dhabi. Vice President JD Vance said in September that the new American company would be valued at about $14 billion. This was less than what analysts had expected. The final price was not disclosed on Thursday.
TikTok CEO Shou Zi Chew said the company would “operate as an independent entity with the autonomy to handle US data protection, algorithm security, content, and software” in a memo to employees, according to a Reuters report.
There Are Still Unresolved Issues Over Chinese Invol
In September, the White House announced that the new joint venture would be operating TikTok’s U.S. app. However, many unanswered questions remain regarding the deal. It remains unclear how business relations between the new joint venture operation and ByteDance may be. On Thursday, the White House referred reporters back to TikTok regarding the deal.
Rush Doshi, a former employee of President Joe Biden’s National Security Council, asked whether “the process of one-party state Beijing” had handed over, licensed, or retained control of the algorithm through Oracle, which, he wondered, may have been no more than a “monitoring” provider.
In September, Chinese mainland media outlets quoted ByteDance as saying it would have an important or operational role. According to a Chinese financial magazine, people close to the transaction said ByteDance would establish a TikTok entity in the US, which would get some revenue from the new TikTok joint venture.
The acquisition is expected to close by January 22 and will bring an end to the years-long pressure on ByteDance to divest its US-based operations. House Select Committee on China Representative John Moolenaar, a Republican who leads the committee, had planned a hearing in 2026 where the leadership of the new TikTok company would be his guests.
Oracle to Serve As Security Partner
In the TikTok deal in the United States, ByteDance has been asked to nominate one of the seven members of the new company’s board of directors. Most of the remaining seats will be held by Americans.
Oracle will play the role of the “trusted security partner” that will vet and ensure the compliance. This entails “safeguarding sensitive US user data, which will be stored in a trusted and secure cloud environment in the United States operated by Oracle,” according to a memo sent to TikTok employees.
Trump has attributed his re-election victory last year to TikTok and has more than 15 million followers on his personal account. The White House has also opened an account on the platform in August.
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