TikTok signed binding agreements with Oracle, Silver Lake and MGX to set up a new U.S. joint venture intended to keep the short-video app operating in the United States, The Associated Press reported, citing an internal memo seen by the outlet. The memo said CEO Shou Zi Chew confirmed that ByteDance and TikTok had signed the agreements with the investor consortium.
Chew wrote to employees that the deal is expected to close on Jan. 22 and told them the company’s focus must remain on delivering for users, creators and businesses as it works through the transition. In the memo, Chew also said the agreements would allow TikTok to “continue to grow and thrive in the U.S. and around the world.”
The agreements split ownership of the new TikTok U.S. venture, with the investors’ group holding half, according to the memo. It said Oracle, Silver Lake and the Emirati investment firm MGX each would hold a 15% share. The memo said ByteDance would hold 19.9% of the new app, with another 30.1% held by affiliates of existing ByteDance investors, and it did not name the remaining investors.
The memo described governance and compliance requirements for the new venture. It said the U.S. company would have a new seven-member majority-American board of directors, and that it would be subject to terms designed to “protect Americans’ data and U.S. national security.” Both TikTok and the White House declined to comment when asked.
On data and technology, the memo outlined how TikTok would handle U.S. user information and its recommendation system. It said U.S. user data would be stored locally in a system run by Oracle, and that users and advertisers would continue “enjoying the same experience as today,” with advertisers continuing to serve global audiences without impact from the deal.
On content ranking, the memo said TikTok’s algorithm—described as the “secret sauce” behind its video feed—would be retrained on U.S. user data to “ensure the content feed is free from outside manipulation.” The U.S. venture would also oversee content moderation and policies within the country.
The company’s proposed separation of the algorithm and U.S. data tracks a long-running security debate around ByteDance and TikTok. U.S. officials have warned that ByteDance’s algorithm is vulnerable to manipulation by Chinese authorities in ways that would be difficult to detect, and they have said regulation passed in the U.S. required any divestment to cut ties with ByteDance, specifically including the algorithm.
The deal also follows years of executive action and deadlines tied to the legislation. After bipartisan majorities in Congress passed a law that would ban TikTok unless it found a new owner not controlled by China’s ByteDance, TikTok was set to go dark on the January 2025 deadline. For several hours, it did go offline, then President Donald Trump signed executive orders keeping it running while the administration sought a sale agreement.
The Associated Press said three more executive orders followed as deadlines were extended, including one in April after White House officials believed they were nearing a spin-off deal with U.S. ownership that later fell apart when China backed out after Trump’s tariff announcement. The story said further orders came in June and September, with Trump saying they would allow TikTok to keep operating if the arrangement met national security concerns.
The memo’s timing arrives as TikTok remains a major news source for younger Americans. The article cited a Pew Research Center report published this fall saying TikTok had more than 170 million U.S. users, and that about 43% of U.S. adults under 30 said they regularly get news from TikTok, more than any other social media app including YouTube, Facebook and Instagram.
In markets, the AP reported that shares of Oracle rose $9.07, or 5%, to $189.10 in after-hours trading.