TikTok has reached an agreement to divest part of its U.S. operations to a group of American investors, ending years of political uncertainty over the app’s future in the United States amid concerns about data access and national security.
Deal Structure And Investor Group
According to a memo reviewed by TechCrunch, TikTok has agreed to sell a portion of its U.S. entity to a consortium led by Oracle, private equity firm Silver Lake, and investment firm MGX. The investor group will collectively hold a 45% stake in the U.S. business, while TikTok’s parent company ByteDance will retain just under 20%.
The transaction values TikTok’s U.S. operations at about $14 billion, according to sources cited by Axios. The same valuation figure was publicly referenced by Vice President JD Vance.
The deal is expected to close on January 22, 2026.
New Operating Entity And Security Oversight
Under the agreement, TikTok’s U.S. operations will be managed by a newly created entity named TikTok USDS Joint Venture LLC. The joint venture will oversee data protection, algorithm security, content moderation, and software assurance.
Oracle will act as the trusted security partner and will be responsible for auditing TikTok’s U.S. operations to ensure compliance with national security requirements. The company already provides cloud infrastructure for TikTok in the United States and manages domestic user data. Oracle had also been part of an earlier bid for TikTok in 2020.
A White House official previously said Oracle would replicate and secure a U.S.-specific version of TikTok’s recommendation algorithm. Under the arrangement, U.S.-based owners would lease the algorithm from ByteDance, with Oracle responsible for retraining and managing it. ByteDance will not have access to U.S. user data or influence over the U.S. algorithm.
Regulatory And Political Context
The agreement follows an executive order signed by President Donald Trump nearly three months ago, approving the sale of TikTok’s U.S. operations to American investors. A week before the deal was finalized, Trump said Chinese President Xi Jinping had approved a transaction allowing U.S. investors to control the platform. ByteDance has said it will ensure TikTok remains available to American users.
TikTok returned to Apple’s App Store and Google Play in February after a temporary outage earlier this year that followed renewed uncertainty over its legal status in the U.S.
Earlier Frameworks And Revised Ownership
In September, reports indicated that U.S. and Chinese officials had agreed on a framework that would place TikTok’s U.S. operations under the control of a consortium including Oracle, Silver Lake, and Andreessen Horowitz. That proposal envisioned U.S. investors holding an 80% stake, with Chinese shareholders retaining the remainder. The finalized deal reflects a revised ownership structure.
Potential App Transition
Bloomberg reported that once the transaction closes, the existing TikTok app may be discontinued in the U.S., requiring users to migrate to a new platform. Details about the new platform, including its features and how it would differ from the current app, have not been disclosed.
Four Years Of Legal And Political Disputes
The dispute over TikTok’s U.S. operations began in August 2020, when Trump signed an executive order banning transactions with ByteDance. A month later, his administration sought to force a sale of TikTok’s U.S. business to an American buyer, with bidders including Microsoft, Oracle, and Walmart. A federal judge later blocked the order, allowing TikTok to continue operating.
Momentum resumed during the Biden administration. After the U.S. Senate passed legislation targeting TikTok, President Joe Biden signed the bill into law. TikTok responded by suing the U.S. government, arguing the ban violated the First Amendment rights of the company and its users. TikTok has consistently denied posing a security risk and said its U.S. data practices comply with domestic law.
Competing Bids And Abandoned Proposals
Over the past year, several investor groups explored bids for TikTok. One was The People’s Bid for TikTok, organized by Project Liberty founder Frank McCourt, with backing from Guggenheim Securities and Kirkland & Ellis. Supporters included Alexis Ohanian, Kevin O’Leary, Tim Berners-Lee, and David Clark.
Another group, the American Investor Consortium, was led by Jesse Tinsley and included David Baszucki, Nathan McCauley, and MrBeast.
Other companies and individuals previously linked to bids included Amazon, AppLovin, Microsoft, Perplexity AI, Rumble, Walmart, Zoop, former Activision chief executive Bobby Kotick, and former U.S. Treasury Secretary Steven Mnuchin.
Featured image credits: Flickr
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