TikTok signs deal to divest U.S. operations to American-controlled joint venture

TikTok has signed an agreement to divest its U.S. operations to a newly formed joint venture controlled by American investors, according to a report by Axios, potentially bringing to a close a years-long political and regulatory standoff over the app’s ownership and national security concerns.

The deal, which is set to close on January 22, was communicated to employees in an internal memo from TikTok CEO Shou Zi Chew. If completed, it would resolve sustained pressure on TikTok and its Chinese parent ByteDance to transfer control of its U.S. business to domestic owners amid concerns around data security and foreign influence.

Under the agreement, the U.S. entity will operate as a joint venture named TikTok USDS Joint Venture LLC. Oracle, Silver Lake and Abu Dhabi-based investment firm MGX will collectively hold 45 percent ownership in the new company. Affiliates of existing ByteDance investors will own nearly one-third of the venture, while ByteDance itself will retain close to 20 percent.

The memo states that the U.S. joint venture will have direct responsibility for U.S. data protection, algorithm security, content moderation and software assurance. It will also retrain TikTok’s content recommendation algorithm using U.S. user data, with the stated objective of ensuring the content feed is free from external or foreign manipulation.

A “trusted security partner” will audit and validate compliance with agreed national security terms, with Oracle designated to take on this role following completion of the transaction, according to the memo.

Once the deal closes, the U.S. joint venture will operate as an independent entity with authority over core trust and safety functions related to the U.S. market. TikTok’s global U.S.-based entities will continue to handle global product interoperability and certain commercial activities, including e-commerce, advertising and marketing, the memo added.

The transaction values TikTok’s U.S. operations at approximately $14 billion, a source confirmed to Axios.

The deal follows a preliminary agreement reached in September between the White House and the Chinese government, which outlined plans to sell TikTok’s U.S. business to a U.S.-controlled joint venture backed by investors including Andreessen Horowitz, Silver Lake and Oracle.

The dispute over TikTok’s U.S. ownership dates back to 2020, when then-President Donald Trump issued an executive order demanding that ByteDance divest the app’s U.S. operations. In 2024, Congress passed legislation mandating a ban on TikTok unless a sale was completed. While the Supreme Court upheld the law earlier this year, enforcement was repeatedly delayed through executive orders as negotiations over a sale continued.

If finalised as planned, the agreement would mark a significant turning point in one of the most closely watched tech and geopolitics battles involving a major social media platform in the U.S.