TikTok has signed a deal to divest its U.S. operations to a new joint venture controlled by American investors, officially setting a closing date of January 22 to avoid a nationwide ban. CEO Shou Zi Chew informed employees today that the business will transfer to a newly formed entity named TikTok USDS Joint Venture LLC next month.
iClarified's Take
This deal stems from a clear legal mandate that left ByteDance with few viable options in the U.S. market. The new structure places ownership control, data custody, and the core recommendation system under American oversight, a setup that is largely intended to address the national security issues behind the ultimatum. With binding agreements signed and a January 2026 closing date set, the outcome appears materially more durable than past efforts. If it holds, it would reduce the shutdown risk that has shaped how creators and small businesses have used the platform in recent years.
The agreement finalizes a plan to satisfy a national security law upheld by the Supreme Court earlier this year, which mandated that China-based ByteDance sell the app's U.S. arm or face a shutdown. The transaction is scheduled to close on January 22, beating the deadline set by President Trump's September executive order. That order paused enforcement of the ban for 120 days, giving the parties until January 23 to finalize the divestiture.
According to a memo obtained by CNBC, the new joint venture will be majority-owned by American investors and governed by a seven-member board with an American majority. A consortium including Oracle, Silver Lake, and the Abu Dhabi-based MGX will hold a combined 50 percent stake, split evenly at 15 percent each. Affiliates of existing ByteDance investors will control just over 30 percent, while ByteDance itself will retain a minority stake of slightly less than 20 percent.
Chew emphasized that the new entity is tasked with "software assurance," content moderation, and protecting user data. Oracle will serve as the "trusted security partner," auditing the platform to ensure compliance with national security terms and hosting sensitive U.S. data within its domestic cloud infrastructure. The venture will also retrain TikTok's core content recommendation algorithm using U.S. data to ensure the feed remains free from foreign manipulation.
While the new joint venture handles security and the core product experience, Chew noted that TikTok's global U.S. entities will continue to manage product interoperability and specific commercial activities, including advertising, marketing, and e-commerce.
The deal reportedly faced significant geopolitical hurdles before reaching this stage. President Trump stated in September that Chinese President Xi Jinping had agreed to move forward with the proposal, though Vice President JD Vance later indicated there was some initial resistance from the Chinese government regarding the agreement.
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