TikTok has formally reached a comprehensive agreement to relinquish a significant portion of its United States operations to a consortium composed primarily of American investors. This landmark decision effectively concludes a protracted and often contentious struggle spanning several years, during which the U.S. federal government persistently attempted to compel the global social media giant to transfer partial control of its American business into domestic hands. The arrangement marks the culmination of extensive political debate, regulatory pressure, and corporate negotiation over TikTok’s ownership structure and data governance within U.S. borders.
According to an internal memorandum authored by ByteDance Chief Executive Officer Shou Chew and obtained by TechCrunch, the newly created partnership will operate under the title “TikTok U.S. Joint Venture.” This name signifies a formal restructuring framework, through which substantial oversight of the platform’s American operations will transition to the group of U.S.-aligned investors. The memo outlines that under this agreement, the new joint venture not only redefines corporate control but also signals the intention to ensure compliance with national standards for technological autonomy and data sovereignty.
Within this reorganization, several major investment entities will assume pivotal roles. The investor group features Oracle—an established leader in cloud infrastructure and enterprise data solutions—alongside Silverlake, a large-scale private equity firm specializing in technology investments, and MGX, an investment company headquartered in Abu Dhabi with a strategic concentration in artificial intelligence ventures. Collectively, these participants will command approximately forty-five percent ownership of TikTok’s United States entity. ByteDance, while surrendering majority control, will retain close to a twenty percent stake, ensuring a measure of influence in future operations. The resulting company, as noted in the memo, will operate under the legal title “TikTok USDS Joint Venture LLC,” constituting a newly defined business structure solely responsible for the U.S. segment of TikTok’s operations.
The memorandum explains that this freshly established joint venture will bear comprehensive authority over the platform’s domestic functioning. Its responsibilities will extend far beyond daily management, encompassing crucial domains such as digital data protection, algorithmic integrity, content moderation standards, and software systems evaluation. In order to maintain governmental confidence, a designated “trusted security partner” will be empowered to audit and verify adherence to the agreed National Security Terms. The memo explicitly identifies Oracle as the partner entrusted with executing these oversight and verification responsibilities upon the completion of the transaction, thereby cementing its dual role as both investor and cyber‑security guarantor.
The official closing date for this complex transaction has been set for January 22, 2026, marking the point at which control will formally transfer under the joint venture structure. Axios first reported the existence of this deal, which has since gained attention for aligning closely with earlier policy directives. Indeed, much of the language used in the ByteDance memo parallels the wording found in a previous executive order issued during the Trump administration in September, which also authorized a transfer of TikTok’s U.S. assets to an American-controlled entity. Past reports by CNBC similarly indicated that Oracle, Silverlake, and MGX were expected to serve as primary financial participants—a prediction now confirmed through official documentation.
Until this disclosure, ByteDance had offered only limited public commentary about negotiations, stating primarily that it would act in accordance with U.S. law to maintain the platform’s continued accessibility for American users. This newly revealed agreement thus represents the first detailed acknowledgment of how TikTok intends to meet the government’s longstanding demands for domestic accountability and operational transparency.
For years, the United States government has expressed explicit concern regarding the security and privacy implications of TikTok’s direct ownership by its Chinese parent company, ByteDance. Officials and legislators have repeatedly voiced apprehension that sensitive user information could be vulnerable to foreign influence or misuse. Invoking those national security considerations, federal authorities have sought structural solutions that would separate, or “cleave,” the American portion of TikTok’s business from ByteDance’s overseas operations. The joint venture, therefore, not only satisfies this persistent governmental requirement but also represents a broader test case in the intersection of technology governance, international investment control, and data protection regulation.
The implications of this transaction are far‑reaching: it signals a significant recalibration in how global technology companies may operate across national boundaries, particularly when their platforms involve massive volumes of user data. As the deal moves toward formal completion, attention will likely shift toward how effectively the new entity, TikTok USDS Joint Venture LLC, manages compliance, safeguards user trust, and demonstrates that an American‑led ownership model can mitigate the political friction that has defined the company’s relationship with the U.S. government to date.
Sourse: https://techcrunch.com/2025/12/18/tiktok-agrees-to-deal-to-cede-control-of-u-s-business-to-american-investor-group/
