TikTok seals US investor deal to sidestep looming American ban

TikTok’s Chinese owner ByteDance has signed binding agreements to place most of its US operations into a new joint venture backed by American and global investors, the company’s chief executive has told staff.

In an internal memo, Shou Zi Chew said the transaction – due to close on 22 January – would secure the app’s future in the US and bring an end to years of political pressure in Washington over national security concerns.

Under the structure outlined to employees:

ByteDance will retain 19.9% of the new US business

Oracle, Silver Lake and Abu Dhabi-based MGX will each hold 15%

A further 30.1% will be owned by affiliates of existing ByteDance investors

TikTok said the agreement would allow its 170 million US users to continue using the platform “as part of a global community”, while responding to American demands for tighter control over data and content moderation.

The deal aligns with an arrangement first floated in September, when then-President Donald Trump postponed enforcement of a law that would have banned TikTok in the US unless its ownership changed.

In April 2024, during President Joe Biden’s term, Congress passed legislation again threatening a nationwide ban on national security grounds unless ByteDance sold the US business. The law, initially due to take effect on 20 January 2025, was repeatedly pushed back while the administration worked on an acceptable restructuring.

Mr Trump has previously said he discussed the issue directly with China’s President Xi Jinping, and claimed Beijing had given the transaction its blessing.

The White House declined to comment and referred questions to TikTok. Oracle and Silver Lake also declined to comment, while MGX has yet to respond publicly.

Under the deal, Oracle – co-founded by Trump ally Larry Ellison – is expected to host and license TikTok’s recommendation algorithm for US users. The system is to be retrained solely on American user data in an effort to firewall feeds from foreign influence.

Critics in Washington, however, say the arrangement may not go far enough.

Democratic senator Ron Wyden argued the structure does little to address privacy concerns or fully guarantee that Americans’ data is protected from misuse, warning that it is not clear the algorithm will end up in “safer hands”.

Senator Wyden opposed the original 2024 ban legislation and was among lawmakers who supported extending TikTok’s deadline to give Congress more time to shape broader protections against perceived security threats from China.

Away from Capitol Hill, some users and businesses that rely on TikTok for income have reacted cautiously.

US small business owner Tiffany Cianci, who has built a following of more than 300,000 on the app, said she was waiting to see how the new ownership mix would affect creators and entrepreneurs. She said she wanted assurances that “the experience and opportunities for small businesses” would not be eroded.

Ms Cianci chose TikTok as her primary marketing channel because, in her view, its revenue-sharing and commercial tools are more favourable to creators than rival platforms such as Meta’s. She has spent the past year helping to organise protests and campaigns in Washington and online to keep the app operating in the US.

TikTok says more than seven million small businesses in America use the platform to promote their goods and services.

For now, the binding agreements mark TikTok’s most concrete step yet to resolve its standoff with Washington – but questions remain over whether the new structure will fully satisfy US security hawks and data-privacy advocates.