TikTok Secures U.S. Future with Oracle‑Led Joint Venture Closing Jan 22
Updated (4 articles)
Deal Structure and Ownership TikTok signed binding agreements with Oracle, private‑equity firm Silver Lake and Emirati state‑owned MGX to create a new U.S. joint venture that will assume control of its American operations. The three investors each receive a 15 % stake, together holding 45‑50 % of the entity, while ByteDance retains 19.9 % and existing ByteDance investors keep roughly 30 % [1][2][3][4]. The transaction is slated to close on January 22, 2026, and the venture will be governed by a seven‑member board with a U.S. majority.
Data Storage and Governance All American user data will be migrated to servers operated by Oracle, satisfying the national‑security requirement for local storage [2][4]. A majority‑American board will oversee the venture, providing direct oversight of data handling and compliance. The agreement includes contractual safeguards to prevent foreign access to the stored information.
Algorithm and Content Moderation Changes TikTok will rebuild its recommendation engine using exclusively U.S. user data, a step intended to block manipulation by external actors [2][4]. The new venture will also assume responsibility for domestic content moderation and policy enforcement. These technical adjustments are planned to roll out gradually to avoid service disruption.
User Base and Market Impact The platform continues to serve over 170 million U.S. users, with 43 % of adults under 30 citing TikTok as a regular news source [2][4]. Oracle’s shares jumped roughly 5 % in after‑hours trading following the announcement, reflecting investor confidence in the deal. Advertisers are assured that the user experience and global ad reach will remain unchanged.
Regulatory Background and Political Reaction The transaction fulfills the Protecting Americans from Foreign Adversary Controlled Applications (PAFACA) Act deadline that mandated divestiture of TikTok’s U.S. operations [3][4]. The White House declined comment, directing inquiries to TikTok, while former President Trump praised the investor consortium as “great American investors” [3][4].
Sources (4 articles)
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[1]
Newsweek: TikTok signs deal to form a U.S. joint venture to continue operating in the United States – details the investor composition, ownership percentages, and the Jan 22 closing date .
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[2]
Associated Press: TikTok Forms U.S. Joint Venture with Oracle, Silver Lake and MGX – emphasizes data localization, board composition, algorithm retraining, and market reaction such as Oracle’s stock rise .
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[3]
Newsweek: TikTok U.S. Business Sale to Oracle, Silver Lake, and MGX Nears Completion – highlights the PAFACA‑driven divestiture, ownership split, continuity assurances, and political commentary from Trump .
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[4]
King5 (Seattle, WA): TikTok signs deal to form new U.S. unit with investors including Oracle, Silver Lake, MGX – focuses on board structure, data handling, user‑base statistics, and the legislative backdrop threatening a ban .
Timeline
Early 2024 – President Biden signs an executive order that keeps TikTok operating in the United States while a divestiture is pursued, signaling federal willingness to avoid a sudden ban and giving the company time to find a buyer. [4]
2024 – Biden also signs the Protecting Americans from Foreign Adversary Controlled Applications (PAFACA) Act, which legally requires TikTok’s U.S. operations to be separated from its Chinese parent, setting a hard deadline for a U.S.‑based owner. [2]
April 2024 – Former President Trump issues an executive order extending the TikTok divestiture deadline, reflecting continued political pressure to resolve national‑security concerns. [4]
June 2024 – Trump issues a second executive order further delaying the deadline, underscoring the administration’s strategic use of executive power to shape the outcome. [4]
September 2024 – Trump issues another executive order and, in a conversation with President Xi, praises the prospective “great” American investors who will run TikTok, indicating bipartisan support for a U.S.‑led consortium. [2]
Dec 18 2025 – TikTok signs binding agreements with Oracle, private‑equity firm Silver Lake and Emirati state‑owned MGX to create a U.S. joint venture; the investors each receive a 15 % stake (45 % total), while ByteDance keeps 19.9 % and its existing investors hold 30.1 %. The venture will store all American user data on Oracle‑managed servers and will rebuild the recommendation algorithm using only U.S. data to block foreign manipulation. [3][4]
Dec 18 2025 – The transaction is described as a “50 % stake” sale to the consortium, with no immediate service disruption expected for users or advertisers. The White House defers comment to TikTok, and the deal is framed as compliance with the PAFACA Act’s divestiture deadline. [2]
Dec 19 2025 – CEO Shou Chew sends an internal memo thanking staff and urging focus on delivering for users, creators, businesses and the TikTok community; he confirms the joint‑venture will close on Jan 22 2026. [1]
Jan 22 2026 (expected) – The U.S. joint venture is slated to close, at which point the new entity will assume control of TikTok’s U.S. operations, completing the divestiture mandated by the PAFACA Act. [1][2][3]