TikTok owner ByteDance signs deal to create new U.S. joint venture
TikTok CEO Shou Chew told employees of the social media app on Thursday that its owner, Chinese company ByteDance, has signed binding agreements to create a new joint venture for the app in the United States, as previously agreed in a deal with the Trump administration.
The deal means the U.S. version of TikTok will become majority-owned by U.S. investors, according to a memo obtained by NBC News.
Investors include US technology giant Oracle, California-based private equity fund Silver Lake and UAE investment firm MGX.
Those investors did not immediately respond to requests for comment. Spokespeople for the White House and Treasury Department also did not respond to requests for comment on the deal.
As part of the deal, TikTok US will also be overseen by a “new seven-member American-majority board of directors,” Chew said.
“The US joint venture will be responsible for data protection, algorithm security, content moderation and software assurance,” Chew wrote in his note. “It will also have the exclusive right and authority to provide guarantees that U.S. content, software and user data are secure.”
In September, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng reached a “framework” agreement to allow American investors to take control of the American version of the application.
TikTok’s legal saga in the United States stems from concerns shared by members of Congress of all parties and the intelligence community that ByteDance’s complicated relationship with the Chinese government poses a threat to U.S. national security.
Millions of Americans post videos on TikTok every day, giving the app and its owners access to far more information about people’s daily lives than many users realize.
These concerns about the data TikTok collects and how it might be used were key drivers behind U.S. lawmakers’ decision to take action to rein in TikTok in 2024.
Under a bipartisan law passed by Congress, ByteDance was required to divest its majority stake in the US version of the app or face a ban originally scheduled to take effect in January of this year.
In January, as Trump prepared to take office, the Supreme Court upheld the law. The High Court rejected TikTok’s argument that an outright ban would violate free speech protections.
On January 18, TikTok was taken offline for US users for approximately 24 hours, causing an uproar among its millions of loyal fans and influential content creators.
Then President-elect Trump announced that he would delay the ban through an executive order as soon as he was sworn in.
That assurance was enough to convince TikTok to begin restoring service just a day before Trump’s inauguration.
However, the Trump administration repeatedly delayed the implementation of this law until it managed to define the contours of an agreement with China. Trump ordered that “the Attorney General take no action on behalf of the United States to enforce the law for 120 days.”
This last deadline ends on January 23. In Thursday’s note, the TikTok CEO says the deal will close a day before the deadline.
Oracle, one of the joint venture’s biggest investors, is controlled by tech billionaire Larry Ellison. His son, David, recently acquired Paramount Global with the approval of the Trump administration. David Ellison is now looking to buy Warner Bros. Discovery via a hostile offer, for more than $108 billion.
Oracle has been one of the darlings of the AI boom, boosting Larry Ellison’s fortune to more than $230 billion, according to Bloomberg Billionaires.
The officially signed agreement is the latest sign of a slow thaw underway in bilateral relations between the United States and China.
Initially, little progress was made despite multiple meetings between Bessent and his Chinese counterparts.
But after Trump and Chinese President Xi Jinping met in person in October, Beijing resumed buying U.S. soybeans and eased export controls on critical minerals.
Now it looks like the TikTok deal will also cross the finish line.
