WASHINGTON — TikTok CEO Shou Chew informed employees Thursday that the app’s owner, China’s ByteDance, has signed binding agreements to establish a joint venture for TikTok in the United States, fulfilling requirements of a deal with the Trump administration and transferring majority ownership to American investors.
The agreement means the U.S. version of TikTok will become majority-owned by American investors, according to a memo obtained by NBC News. The investor group includes technology giant Oracle, California-based private equity firm Silver Lake, and United Arab Emirates investment fund MGX.
The investors did not immediately respond to requests for comment. White House and Treasury Department spokespeople likewise did not reply to inquiries about the deal.
An employee who received the memo said internal reaction was generally positive among TikTok’s American staff, though most colleagues in Asia and Europe had not yet seen the communication or weighed in on it.
The deal establishes a “new seven-member majority-American board of directors” to oversee TikTok U.S., Chew said.
“The U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance,” Chew wrote. “It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”
Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng reached a “framework” deal in September to enable American investors to assume control of the U.S. version of the application.
TikTok’s legal troubles in the United States stem from concerns shared by lawmakers across parties and the intelligence community that ByteDance’s complex relationship with the Chinese government poses national security threats.
Millions of Americans post videos on TikTok daily, effectively granting the app and its owners access to substantially more information about people’s lives than many users realize. Concerns about data TikTok collects and potential uses were primary drivers behind lawmakers’ decision to take action against the platform in 2024.
Under bipartisan legislation passed by Congress, ByteDance was required to divest majority ownership of the U.S. app or face a ban initially scheduled to take effect in January 2024.
In January, as Donald Trump prepared to return to office as president, the Supreme Court upheld the law, rejecting TikTok’s argument that an outright ban would violate free speech protections.
On January 18, TikTok went offline for U.S. users for approximately 24 hours, triggering an uproar among millions of loyal fans and influential content creators. Trump then announced he would delay the ban through an executive order upon being sworn in.
That assurance persuaded TikTok to begin restoring service just one day before Trump’s inauguration.
The Trump administration repeatedly delayed implementing the law while negotiating an agreement with China. Trump ordered that “the Attorney General shall not take any action on behalf of the United States to enforce the Act for 120 days.”
That latest timeline expires January 23. In Thursday’s memo, Chew said the agreement will close one day before the deadline.
Oracle, one of the largest investors in the joint venture, is controlled by technology billionaire Larry Ellison. His son David recently acquired Paramount Global with Trump administration approval. David Ellison is now pursuing a hostile bid exceeding $108 billion to buy Warner Bros. Discovery.
Oracle has thrived during the artificial intelligence boom, expanding Larry Ellison’s fortune to more than $230 billion, Bloomberg Billionaires reported.
The formally signed agreement represents the latest sign of a gradual thaw in U.S.-China bilateral relations. Initially, minimal progress occurred despite multiple meetings between Bessent and his Chinese counterparts.
However, after Trump and Chinese President Xi Jinping met in October, Beijing resumed purchasing American soybeans and eased export controls on critical minerals. Now the TikTok deal appears poised to reach completion as well.
The joint venture structure addresses national security concerns while preserving TikTok’s U.S. operations, which have become integral to American digital culture and commerce. The platform’s 170 million American users span demographics from teenagers sharing dance videos to small businesses marketing products to political campaigns reaching voters.
The majority-American ownership and governance structure aims to satisfy congressional demands for U.S. control over data handling and algorithmic decisions affecting American users. Whether these arrangements prove sufficient to allay national security concerns or merely create a corporate facade masking continued Chinese influence will depend on implementation details and oversight mechanisms.
The involvement of UAE firm MGX as a minority investor introduces international complexity to what lawmakers framed as an American takeover. While the UAE maintains strategic partnerships with the United States, its inclusion raises questions about whether the joint venture truly represents American control or creates multinational ownership that could complicate future security assessments.
Oracle’s central role reflects the company’s existing relationship with TikTok. Oracle has hosted TikTok’s U.S. user data since 2022 under an arrangement designed to address security concerns, giving the company technical infrastructure knowledge that positions it well to assume larger responsibilities under the joint venture.
Larry Ellison’s fortune ballooning past $230 billion partly through Oracle’s AI infrastructure business creates potential conflicts as TikTok’s algorithmic recommendations represent precisely the kind of AI application driving demand for Oracle’s cloud computing services. Whether Oracle can objectively oversee TikTok’s algorithms while benefiting from the broader AI boom merits scrutiny.
The Ellison family’s expanding media empire—David’s Paramount acquisition and Warner Bros. Discovery bid—adds another dimension. If TikTok operates under Oracle’s substantial influence while the Ellisonsgain control over traditional media properties, concentration of power over information distribution could rival tech giants like Meta or Google.
The deal’s completion just before the January 23 deadline reflects brinkmanship by all parties. ByteDance maximized negotiating leverage by approaching the deadline, Trump administration officials preserved credibility with congressional China hawks by securing American majority ownership, and TikTok avoided catastrophic service disruption that could have driven users to competitors.
For ByteDance, retaining minority ownership while ceding control represents a pragmatic compromise. Complete divestment would have meant losing access to TikTok’s lucrative American market entirely, while the joint venture preserves some financial interest and potential influence even as operational control shifts to American investors.
The seven-member majority-American board structure will determine how genuinely independent TikTok U.S. becomes from ByteDance. If American board members possess real authority to make decisions contrary to ByteDance interests, the arrangement could satisfy security concerns. If they function as figureheads while ByteDance maintains de facto control through technical dependencies or contractual arrangements, the national security threats that motivated the original legislation would persist.
The agreement’s provisions for “algorithm security” and exclusive authority over content, software, and data for American users sound comprehensive but raise implementation questions. Can U.S. entities truly secure algorithms initially developed by ByteDance? Does “exclusive authority” mean complete technical separation or merely oversight responsibilities? These details will determine whether the joint venture achieves genuine security or creates elaborate theater.
The slow thaw in U.S.-China relations that enabled the TikTok deal reflects pragmatic recognition by both nations that complete decoupling imposes costs neither wishes to bear. The agreement demonstrates that even amid strategic competition, specific deals addressing mutual interests remain possible when political will exists.
As the January 22 closing date approaches, the TikTok saga that has consumed Washington for years appears headed toward resolution—though whether the joint venture structure proves a durable solution or merely postpones inevitable confrontation over Chinese tech platforms in America remains to be seen.
