TikTok agrees to sell US operations to American-led investor group

TikTok users in the US can breathe a sigh of relief, as ByteDance has struck a deal that will keep the app active in the country. According to CNBC, ByteDance has agreed to place TikTok’s US business under a new structure that hands majority control to a group of investors led by American firms.

TikTok CEO Shou Zi Chew informed employees that the company’s US operations will be housed in a newly formed entity called TikTok USDS Joint Venture LLC. This structure allows TikTok to continue operating for its 170 million US users while formally separating American operations from direct control by ByteDance. The agreement is set to take effect on January 22, one day before the expiration of an executive order that paused the enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act.

According to Chew’s internal memo, the joint venture has signed agreements with three managing investors: Oracle, private equity firm Silver Lake, and Abu Dhabi based investment company MGX. While the investor group is often described as US led, the presence of MGX means the ownership is not exclusively American. Even so, this is broadly the same group that US officials had previously indicated they were willing to approve during earlier negotiations that stalled amid political and regulatory uncertainty.

Under the reported ownership breakdown, Oracle, Silver Lake, and MGX will collectively hold about 45% of the new US entity. Affiliates of existing ByteDance investors will own roughly 30.1%, while ByteDance itself will retain a 19.9% stake. The company will also operate under a new board structure with seven directors, a majority of whom are expected to be US nationals.

One of the most sensitive parts of the negotiations has always been TikTok’s algorithm. US officials have long argued that control over the recommendation system could allow indirect influence over what content users see. In his message to staff, Chew said the new US entity will retrain the algorithm using American user data to make sure the feed is not subject to outside manipulation. What that retraining looks like in practice, and how independent it will be from ByteDance’s global systems, remains to be seen.