TikTok's Chinese owner ByteDance signed binding agreements to form a joint venture that will hand control of operations of TikTok's US app to American and global investors, according to a memo by TikTok CEO Shou Zi Chew seen by Reuters.
The deal, set to close on January 22, would end years of efforts to force ByteDance to divest its US business over national security concerns.
According to an internal memo cited by Bloomberg and Axios, TikTok CEO Shou Chew told employees that the social media company as well as its Chinese owner ByteDance had agreed to the new entity, with Oracle, Silver Lake and Abu Dhabi-based MGX on board as major investors.
Oracle’s executive chairman and founder Larry Ellison is a longtime ally of US President Donald Trump.
Chew said that ByteDance will retain around 20% of the new joint venture — the maximum ownership allowed for a Chinese company under the law.
The deal largely confirms a September announcement by the White House that said the new venture would meet the requirements of a 2024 law that threatened to ban the wildly popular app in the United States if ByteDance stayed majority owner.
The new set-up for TikTok is in response to a law passed under Trump’s predecessor, Joe Biden, that has forced ByteDance to sell TikTok’s US operations or face a ban in its biggest market.
US policymakers, including Trump in his first presidency, have warned that China could use TikTok to mine data from Americans or exert influence through its state-of-the-art algorithm.
Chew said the US joint venture would operate as an independent entity with authority over “US data protection, algorithm security, content moderation and software assurance.”
Trump in September had specifically named Oracle boss Ellison, one of the world’s richest men, as a major player in the arrangement.
Ellison has returned to the spotlight through his dealings with Trump, who has brought his old friend into major AI partnerships with OpenAI.
Ellison has also financed his son David’s recent takeover of Paramount and is involved in his son’s bidding war with Netflix to take over Warner Bros.
