TikTok signs deal for U.S. unit after yearslong saga

TikTok has signed a deal to divest its U.S. entity to a joint venture controlled by American investors.

Why it matters: A deal would end a yearslong saga to force TikTok’s Chinese parent ByteDance to sell the company’s U.S. operation to domestic owners to alleviate national security concerns.

Zoom in: The agreement is set to close on Jan. 22, per an internal memo sent by CEO Shou Chew.

• Oracle, Silver Lake and Abu Dhabi-based MGX will collectively own 45% of the U.S. entity, which will be called “TikTok USDS Joint Venture LLC.”
• Nearly one-third of the company will be held by affiliates of existing ByteDance investors, and nearly 20% will be retained by ByteDance.

Between the lines: The U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation and software assurance, per the memo.

• It will be responsible for “retraining the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation.
• “A trusted security partner will be responsible for auditing and validating compliance with the agreed upon National Security Terms, and Oracle will be the trusted security partner upon completion of the transaction,” the memo notes.
• Upon the closing, the U.S. joint venture “will operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation and software assurance, while TikTok global’s U.S. entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing,” it adds.

By the numbers: The deal values TikTok U.S. at around $14 billion, a source confirmed to Axios.

Catch up quick: The White House and the Chinese government hammered out a deal in principle in September to sell TikTok’s U.S. operations to a joint venture controlled by a U.S. investor group led by Andreessen Horowitz, Silver Lake and Oracle.

Flashback: Trump first issued an executive order demanding that ByteDance sell its U.S. operations in 2020.

• Congress passed a law in 2024 to ban the app unless it was sold.
• The Supreme Court upheld that law in January, but Trump repeatedly postponed its enforcement through a series of executive orders while his administration tried to negotiate a sale.