TikTok divest deal officially signed with Oracle, Silver Lake, and MGX
TikTok and its Chinese owner, ByteDance, signed binding agreements with three major investors on Thursday, guaranteeing that the short-form app will continue to operate in the US.
The agreement stipulates that just over 80% of the company's US assets will be sold to a consortium of American and global investors, a major step toward resolving years of uncertainty for millions of Americans who use the popular app.
TikTok CEO Shou Zi Chew announced the news to his employees soon after the deal was officially inked in a company memo seen by multiple news outlets.
The new enterprise, “TikTok USDS Joint Venture LLC,” will be managed by all three investor companies, Chew's memo states.
"Over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community," it said.
The trio of investors – Oracle, Silver Lake, and the Abu Dhabi-based MGX – will collectively own 45% of the new entity, just under the 50% expected shares reported in September.
According to the memo, the 45% shares will be split between the three companies at 15% each. ByteDance will retain 19.9% of shares, while existing shareholders of ByteDance will hold 30.1% shares.
The long-awaited deal – which will see the app’s algorithm copied and retrained using the data of American users – is expected to close next month on January 22nd, the company missive said.
Additionally, Oracle is expected to take over responsibility for the storage of Americans’ data, with the US venture handling content moderation for American users.
However, CNN reports that Chew’s memo suggests “the ByteDance-controlled global TikTok entity will continue to manage e-commerce, advertising, and marketing on the new US platform.”
Years of wrangling come to an end
The details of the TikTok agreement are said to align with the deal that US President Donald Trump unveiled in September, meaning Thursday’s deal meets ByteDance’s divestiture requirements.
The September 24th Executive Order had delayed enforcement of the law until December 16th, allowing time for ByteDance and TikTok’s “rumoured investors” to hammer out the deal, line up additional investors, and win approval from the Chinese government.
The divest law, requiring the US government to ban the app unless the Chinese-owned ByteDance sells its US assets from the platform, was passed in 2024 by the Biden administration.
Ironically, in August 2020, then-President Trump first attempted to ban the app, albeit unsuccessfully, citing national security concerns and worries over the app's extensive data collection of US citizens.
Since taking office for his second Presidential term, Trump has postponed the original January 20 enforcement deadline several times, including in January, April, June, and again in September.
Trump has credited TikTok with helping him win re-election in 2024. At the time, Trump had roughly 15 million followers on his personal account, while the White House launched an official TikTok account in August.
Trump, TikTok, Oracle and the White House have not commented on the deal as of this report.
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