David Bridges
Key Highlights
- Agreement: TikTok will divest its U.S. operations to a joint venture with American investors.
- Stake: American investors will hold a 45 percent stake in the new entity, “TikTok USDS Joint Venture LLC.”
- Deadline: The closing date for the deal is set for January 22.
- Data Protection: The joint venture will manage U.S. data protection and algorithm security.
After years of ban threats, deadline extensions, and geopolitical brinkmanship, TikTok’s long-running U.S. saga may finally be nearing its end. TikTok has signed an agreement to divest its U.S. operations to a joint venture controlled by American investors, according to an internal memo first reported by Axios and later confirmed by CNN on Dec. 18.
The deal, reportedly outlined in a memo sent to employees by TikTok CEO Shou Chew, is expected to close on Jan. 22 and represents a major step toward resolving a years-long standoff over the app’s ownership and national security concerns. While the transaction is not yet finalized, it would bring TikTok closer to complying with a U.S. law requiring its Chinese parent company, ByteDance, to sell the app’s American business or face a ban from U.S. app stores.
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Under the agreement, the U.S. entity — to be called “TikTok USDS Joint Venture LLC” — will be jointly owned by a group of American investors and ByteDance. Oracle, Silver Lake, and Abu Dhabi-based MGX will collectively hold a 45 percent stake in the company. Affiliates of existing ByteDance investors will own nearly one-third, while ByteDance itself will retain just under 20 percent.
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According to the memo, as reported by Axios, the newly formed joint venture will take over responsibility for U.S. data protection, algorithm security, content moderation, and software assurance. The memo also says TikTok’s content recommendation algorithm will be retrained using U.S. user data, a step intended to ensure the platform’s feed is “free from outside manipulation.”
The most recent extension pushes the effective deadline to Jan. 23, giving TikTok additional time to complete the divestiture. Trump said in a September executive order that a plan had been presented to him for a “qualified divestiture” of TikTok’s U.S. operations, justifying another 120-day delay.
Negotiations over a sale have been marked by uncertainty and geopolitical tension, with the Chinese government expressing opposition to a forced divestment and signaling it could block a deal. Still, Axios reported that the White House and Chinese officials reached a deal in principle in September for a U.S.-controlled joint venture led by investors including Andreessen Horowitz, Silver Lake, and Oracle.
The move would end a saga that began in 2020, when Trump first issued an executive order seeking to force ByteDance to sell TikTok’s U.S. business over national security concerns.
