TikTok Signs US Joint Venture Deal to Avoid Ban, Oracle Among Key Investors

Washington,  — TikTok has signed a joint venture agreement with a consortium of investors that will allow the social media company to continue operating in the United States and sidestep a looming ban over its Chinese ownership.

In an internal memo reviewed by AFP, TikTok CEO Shou Chew informed employees that the new entity includes major investors Oracle, Silver Lake, and Abu Dhabi-based MGX. ByteDance, TikTok’s Chinese parent company, will retain just under 20 percent ownership, the legal maximum for a Chinese firm under U.S. law.

Chew stated that the U.S. joint venture will oversee data protection, algorithm security, content moderation, and software assurance for American users. “It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure,” he added.

The investor consortium will collectively hold half of the U.S. venture, with Oracle, Silver Lake, and MGX each holding 15 percent. Affiliates of existing ByteDance investors will control just over 30 percent. TikTok Global’s U.S. entities will manage certain commercial activities including advertising, e-commerce, marketing, and global product interoperability.

The deal comes in response to U.S. legislation that threatened to ban TikTok unless ByteDance divested its U.S. operations. Policymakers, including former President Donald Trump, cited concerns that TikTok could be used to collect data from Americans or exert influence through its algorithm.

The joint venture deal, set to close on January 22, fulfills the terms outlined in the 2024 law and follows a White House announcement in September confirming a new venture agreement with China. Trump had previously highlighted Oracle founder Larry Ellison, a longtime ally, as a key figure in the arrangement.

Experts say the deal is a compromise that allows ByteDance to maintain access to the lucrative U.S. market while focusing on new ventures, including artificial intelligence projects and potential IPO plans. However, analysts caution that TikTok could still face regulatory hurdles from the U.S. government in the future.

“Keeping the U.S. operation live is itself a victory,” said Li Chengdong, founder of Chinese technology consultancy Dolphin. Zhang Yi of iiMedia noted, “The U.S. market is of paramount importance to TikTok, but the regulatory environment remains a risk.”