TikTok Finalizes U.S. Joint Venture Deal to Comply With Divest-or-Ban Law
WASHINGTON,— TikTok has finalized an agreement to sell a significant stake in its U.S. operations to comply with a federal divest-or-ban law. The move allows the platform to continue operating in the United States. The deal was confirmed in an internal memo sent Thursday by TikTok Chief Executive Shou Zi Chew. Axios, CNBC, and The Hollywood Reporter first reported the agreement.
The transaction creates a new entity called TikTok USDS Joint Venture LLC to run the company’s U.S. business. The deal is scheduled to close on Jan. 22, 2026, subject to final regulatory approval. Ownership will be split among new American investors, existing ByteDance investors, and TikTok’s parent company, ByteDance.
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According to the internal memo, 50 percent of the U.S. joint venture will be held by a consortium of new investors. That group includes Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX, each taking a 15 percent stake. Affiliates of certain existing ByteDance investors will control 30.1 percent, while ByteDance will retain a 19.9 percent ownership interest, below the threshold set by U.S. law.
The agreement follows months of negotiations driven by a U.S. statute that requires TikTok to divest most of its American assets or face a nationwide ban. The platform briefly went offline in the United States in January after missing an earlier divestment deadline. U.S. President Donald Trump later granted multiple extensions to allow the company more time to finalize a deal. The most recent extension pushed the deadline to Jan. 23.
The new joint venture will be governed by a seven-member board of directors, with a majority of seats held by U.S. citizens. The entity will have authority over data protection, content moderation, algorithm security, and software assurance for American users. TikTok said the recommendation algorithm used in the United States will be retrained using U.S. user data to reduce the risk of foreign influence.
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Sensitive U.S. user data will be stored in a secure cloud environment located in the United States and operated by Oracle. The company will also serve as a trusted security partner, responsible for auditing systems and validating compliance with national security requirements outlined in a U.S. executive order signed on Sept. 25, 2025.
Once the transaction is completed, TikTok USDS Joint Venture LLC will operate independently, building on the company’s existing U.S. Data Security framework. TikTok’s global entities will continue to manage international product interoperability and some commercial operations, including advertising, e-commerce, and marketing. The company said the changes are not expected to affect advertisers or the experience of its more than 170 million users in the United States.
The sale follows nearly a year of uncertainty after former President Joe Biden signed the original divest-or-ban law. During that period, several companies and investors, including Microsoft, Amazon, Walmart, and other business groups, expressed interest in acquiring a stake in TikTok’s U.S. business. TikTok declined to comment publicly on the finalized agreement.
