TikTok says it signed agreements to create new US joint venture

TIKTOK chief executive officer Chew Shou Zi told employees that the social media app’s parent company, ByteDance, signed binding agreements to create a US joint venture majority-owned by American investors.

In an internal memo reviewed by Bloomberg, Chew said he was “pleased to share some great news” and said agreements with Oracle Corp, Silver Lake and MGX have been signed.

“Upon the closing, the US joint venture, built on the foundation of the current TikTok US Data Security (USDS) organisation, will operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance,” Chew said in the memo.

Meanwhile, “TikTok global’s US entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing,” he wrote.

The memo outlined a deal that matched what the White House announced in September, which was pending approval from China.

Chew’s memo does not mention China’s opinion on the transaction. It says 50 per cent of the investors will be new, with Oracle, Silver Lake and MGX, an Abu Dhabi-based investment company, retaining 15 per cent each; 30.1 per cent will be held by affiliates of certain existing investors of ByteDance; and 19.9 per cent will be retained by ByteDance.

After more than a year of negotiations, Washington arranged a sale of the US arm of ByteDance’s popular video app to a consortium of investors.

If finalised, the deal would remove a persistent issue in Beijing-Washington relations and signal progress in broader talks. But it would also deprive China’s most valuable private company of total control of an American social media phenomenon. 

ByteDance’s coveted algorithms are considered central to TikTok’s business. Under the deal proposed by Washington, ByteDance will license its AI recommendation technology to a newly created US TikTok entity, which will use the existing algorithm to retrain a new system that is secured by Oracle, TikTok’s cloud partner. 

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The White House had dominated disclosures about the proposed arrangement, which was mandated on national security grounds by a law signed last year under the Joe Biden administration.

US officials have expressed concern that TikTok is owned by a Chinese company, and are worried that Beijing could use the app to collect data about US citizens or push specific narratives to Americans via the app’s recommendation algorithm. 

Under the law, the initial deadline for the sell-or-ban rule was this past January, but Trump has extended this deadline multiple times since reentering office, most recently pushing it into January 2026. BLOOMBERG