TikTok signs deal to form U.S. unit with Oracle, Silver Lake and MGX
New U.S. venture would be majority American-owned, with data safeguards and governance aimed at addressing national security concerns
TikTok has signed binding agreements to form a new U.S. joint venture with Oracle, Silver Lake and MGX to operate the platform in the United States. The deal would allocate 15% of the new U.S. TikTok entity to each of Oracle, Silver Lake and MGX, with ByteDance holding 19.9% and affiliates of existing ByteDance investors holding 30.1%. The arrangement also includes a seven‑member board, a majority of whom would be American, and governance terms designed to protect Americans’ data and U.S. national security. The companies say the deal is expected to close on Jan. 22, according to an internal memo reviewed by The Associated Press.
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The U.S. venture is intended to store U.S. user data locally in a system operated by Oracle, and to retrain TikTok’s recommendation algorithm on U.S. user data to reduce potential foreign influence on the content feed. In addition, the venture will oversee content moderation and policies applicable within the United States.
The deal arrives after years of regulatory uncertainty over the platform’s fate in the United States. U.S. officials have long warned that ByteDance’s control of the algorithm could be leveraged for influence by Chinese authorities, a concern that has fueled efforts to force structural changes at TikTok.
Lawmakers in Congress advanced a bipartisan framework that could have allowed a ban on TikTok if the company did not separate from ByteDance to satisfy national security concerns. The administration and lawmakers highlighted that any divestment would need to sever ties with the platform’s core algorithm. The broader political landscape included a string of executive orders issued by former President Donald Trump aimed at keeping TikTok operating while a sale was negotiated, and continued intergovernmental negotiations under the Biden administration.
TikTok has more than 170 million users in the United States, a size that underscores why a sale or reorganization of the company’s U.S. operations has been a focal point of national security debates.
The collaboration brings together a trio of American backers—Oracle, Silver Lake and MGX—with ByteDance continuing to hold a stake alongside affiliates of existing ByteDance investors. While the specifics of ownership add up to a majority of the venture being held by U.S. investors, the distribution of shares and the total capitalization are subject to final language in closing documents.