TikTok has agreed to sell its U.S. operations to a new American-controlled venture, fulfilling the requirements of legislation that ordered the platform to divest its American unit or face a nationwide ban early next year.
According to an internal memo first reported by Axios, the short-form video company will transfer its U.S. entity into a joint venture controlled by Oracle, Silver Lake, and the Abu Dhabi–based MGX. The group will collectively hold a 45 percent stake in the new company, named TikTok USDS Joint Venture LLC. ByteDance, TikTok’s Beijing-based parent, will retain a 20 percent stake, while affiliates of existing ByteDance investors will hold nearly one-third of the venture.
The U.S. entity will take charge of functions that lawmakers and regulators have scrutinized for years: data protection, algorithm safeguards, content moderation, and software assurance. The memo says the agreement is on track to close on January 22.
TikTok CEO Shou Chew praised employees in the memo, writing, “I want to take this opportunity to thank you for your continued dedication and tireless work.” He added that, “Your efforts keep us operating at the highest level and will ensure that TikTok continues to grow and thrive in the U.S. and around the world. With these agreements in place, our focus must stay where it’s always been — firmly on delivering for our users, creators, businesses and the global TikTok community.”
A Long Political and Legal Fight
The agreement represents the culmination of years of U.S. government pressure over concerns that TikTok’s Chinese ownership could expose American users’ data to the Chinese Communist Party. Lawmakers in both parties have also raised alarms about TikTok’s highly effective recommendation engine and its weak privacy architecture.
The dispute stretches back to TikTok’s first major confrontation with Washington in 2020, when then-President Donald Trump issued an executive order directing the platform to sell its U.S. operations to American investors. That initial divestment attempt stalled in court, but Congress later passed a bipartisan law—signed by then-President Joe Biden—requiring TikTok to complete a sale by January 2025 or be banned from U.S. app stores and web-hosting services.
TikTok challenged the law, but the U.S. Supreme Court upheld it, clearing the way for enforcement. After returning to the White House, Trump repeatedly delayed the law’s implementation as his administration worked with American partners and Chinese authorities to shape an agreement acceptable to both sides.
Although Trump supported a similar divestment requirement during his first term, he opposed the recent bipartisan legislation, arguing that it would give an advantage to TikTok’s competitors such as Meta. Yet his administration also embraced the platform in other ways, launching an official White House TikTok account in August and using the app to reach younger voters. Trump himself joined TikTok during the 2024 campaign.
A Platform With Enormous Reach
TikTok remains one of the most influential social platforms in the United States, with an estimated 150 million American users, especially among Millennials and Generation Z. The new joint-venture structure is intended to keep the app accessible in the U.S. while addressing national-security and data-governance concerns that have fueled bipartisan scrutiny.
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