TikTok agrees to sell its U.S. operations to American investors, including Oracle and Silver Lake.

TikTok has entered into a significant partnership with three prominent investors—Oracle, Silver Lake, and MGX—creating a new joint venture focused on maintaining its operations in the United States. This development comes as a response to ongoing concerns regarding data privacy and national security, particularly in light of TikTok’s ownership by the Chinese company ByteDance.

The agreement is projected to finalize on January 22, as indicated by an internal memo reviewed by Media News Source. In the memo, CEO Shou Zi Chew communicated to employees that the binding agreements were signed with the consortium, which includes major U.S. technology and investment firms. This partnership serves as a strategic move aimed at alleviating concerns associated with foreign ownership of the platform.

Under the structure of the new joint venture, the investor group will collectively hold 50% of the entity, with each involved firm—Oracle, Silver Lake, and MGX—possessing a 15% stake. ByteDance will maintain a 19.9% share, while a further 30.1% will be held by affiliates of existing ByteDance investors. The identities of these additional investors remain undisclosed, and both TikTok and the White House have opted not to comment on this aspect.

A streamlined governance structure is also set to be established, featuring a majority-American board of directors comprising seven members. This board will be tasked with overseeing operations that prioritize the protection of American user data and address national security concerns. Significantly, user data for TikTok’s American user base will be stored locally through Oracle-managed systems, reinforcing data privacy protocols.

Central to the negotiations is the management of TikTok’s algorithm. The platform’s content delivery mechanism will undergo retraining on U.S. user data to mitigate the risk of external manipulation, particularly from foreign entities. U.S. officials have previously raised concerns about the possibility of the Chinese government influencing TikTok’s content through its algorithm, emphasizing the need for safeguards against such vulnerabilities.

This new venture arrives amidst a regulatory landscape that has seen bipartisan support for measures aimed at ensuring TikTok’s operations in the U.S. remain under domestic control. The transition marks a pivotal moment for TikTok, which has over 170 million users in the United States. Data from the Pew Research Center indicates that approximately 43% of American adults under the age of 30 gravitate towards TikTok as a primary source of news, surpassing other major social media platforms.

The establishment of this joint venture represents a crucial step in resolving the prolonged uncertainty surrounding TikTok’s future in the U.S., aligning the interests of domestic investors with the need for stringent data protection. As the deal moves toward completion, the foundation has been laid for TikTok to continue its growth trajectory while addressing the critical issues tied to its global operations.