TikTok Reaches Landmark Agreement to Form American-Led Joint Venture and Avert U.S. Ban
TikTok has officially entered a binding agreement to form a new United States joint venture with a group of American-led investors. This move effectively ends a yearslong political and legal struggle over its operational status in the country. The social media giant announced the development through an internal memo sent to staff by Chief Executive Officer Shou Zi Chew on Thursday. This transaction is specifically designed to comply with federal divestment laws. The deal is scheduled to close on January 22, 2026. The new entity will be known as TikTok USDS Joint Venture LLC. It will operate as an independent organization within the American market. This move secures the future of the platform for more than 170 million domestic users. These users have faced the threat of a nationwide ban since early 2024.
The ownership structure of the new joint venture ensures that the platform is majority-owned by American and allied interests. A consortium of new investors will collectively hold a 50 percent stake in the venture. These investors include cloud computing leader Oracle, private equity firm Silver Lake, and Abu Dhabi-based MGX. Each of these three managing investors will maintain a 15 percent ownership share. ByteDance will retain a 19.9 percent minority stake. This is the maximum amount permitted for a Chinese entity under current U.S. regulations. The remaining 30.1 percent will be held by affiliates of existing ByteDance investors. Many of these affiliates are already based in the United States. A new seven-member board of directors will govern the venture. The majority of these board members must be American citizens.
Security and data protection remain at the core of this landmark settlement with the federal government. Oracle will serve as the primary security partner for the new company. It will be responsible for storing all U.S. user data on its domestic cloud infrastructure. The new joint venture will have the exclusive authority to oversee content moderation and software assurance. It will also manage algorithm security within the United States. A significant component of the deal involves retraining the platform recommendation algorithm. The entity will use only U.S. user data for this process. This measure is intended to insulate the content feed from potential outside manipulation. While TikTok Global will manage international interoperability, the U.S. entity will control all domestic commercial activities. This includes advertising and marketing.
This agreement marks the culmination of intense negotiations between the Trump administration and ByteDance leadership. President Donald Trump previously issued multiple executive orders to delay the enforcement of a 2024 divest-or-ban law. These delays allowed time for a qualified divestiture to be organized. The White House recently determined that this joint-venture framework satisfies all national security criteria. It resolves the concerns originally raised by lawmakers. By establishing this majority-American governance model, TikTok avoids a total exit from its most profitable market. Investors reacted positively to the news. Oracle shares saw a notable increase in after-hours trading following the announcement. The finalization of this deal is expected to stabilize the broader social media landscape in early 2026.
