Key Takeaways
- TikTok has signed agreements with three major investors — Oracle, Silver Lake, and MGX — to form a new TikTok U.S. joint venture, ensuring the platform can continue operating in the United States.
- The new venture will have a majority-American board of directors and will be subject to terms that protect Americans’ data and U.S. national security.
- U.S. user data will be stored locally in a system run by Oracle, and the platform’s algorithm will be retrained on U.S. user data to prevent outside manipulation.
- The deal marks the end of years of uncertainty about the fate of TikTok in the United States, following a law passed by Congress that would ban the platform if it did not find a new owner.
Introduction to the TikTok Deal
TikTok, the popular social video platform, has signed agreements with three major investors — Oracle, Silver Lake, and MGX — to form a new TikTok U.S. joint venture. This move ensures that the platform can continue operating in the United States, putting an end to years of uncertainty about its fate. According to a memo from CEO Shou Zi Chew, the binding agreements were signed with the consortium, and the deal is expected to close on January 22. The new venture will have a new, seven-member majority-American board of directors, and will be subject to terms that protect Americans’ data and U.S. national security.
Details of the TikTok Deal
The new TikTok U.S. joint venture will be owned by a group of investors, including Oracle, Silver Lake, and MGX, who will each hold a 15% share. ByteDance, the parent company of TikTok, will hold 19.9% of the new app, while affiliates of existing ByteDance investors will hold 30.1%. The memo did not disclose the names of the other investors, and both TikTok and the White House declined to comment. The U.S. venture will be responsible for storing U.S. user data locally in a system run by Oracle, and will oversee content moderation and policies within the country. Additionally, the platform’s algorithm will be retrained on U.S. user data to ensure that the content feed is free from outside manipulation.
Background and Context
The deal comes after years of uncertainty about the fate of TikTok in the United States. In 2025, a law was passed by Congress that would ban the platform if it did not find a new owner in place of China’s ByteDance. The law was signed by President Joe Biden, and TikTok was set to go dark on the law’s January 2025 deadline. However, President Donald Trump signed an executive order to keep the platform running while his administration tried to reach an agreement for the sale of the company. Several executive orders followed, as Trump continued to extend the deadline for a TikTok deal. The deal with Oracle, Silver Lake, and MGX marks the end of this uncertainty, and ensures that TikTok can continue to operate in the United States.
Implications of the Deal
The deal has significant implications for TikTok’s users and advertisers. According to the memo, U.S. users will continue to enjoy the same experience as today, and advertisers will continue to serve global audiences with no impact from the deal. The platform’s algorithm, which has been a central issue in the security debate over TikTok, will be retrained on U.S. user data to prevent outside manipulation. This move is expected to alleviate concerns about the platform’s vulnerability to manipulation by Chinese authorities. The deal also marks a significant investment in the U.S. technology sector, with Oracle’s shares jumping 5% in after-hours trading following the announcement.
Conclusion and Future Outlook
The deal between TikTok and its new investors marks a new chapter for the popular social video platform. With a majority-American board of directors and a commitment to protecting Americans’ data and U.S. national security, the platform is well-positioned to continue growing and thriving in the United States. As the platform moves forward, it will be important to monitor its progress and ensure that it is meeting its commitments to its users and the U.S. government. With over 170 million users in the U.S. and a significant presence in the social media landscape, TikTok is an important player in the U.S. technology sector, and its future success will have significant implications for the industry as a whole.
