TikTok signs agreement for new joint venture keeping it online in the U.S.

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TikTok has reached an agreement with Oracle and two other companies, ensuring it can keep operating in the United States.

The agreement, scheduled to be finalized on January 22nd, will be owned primarily by a new group of investors. This group includes tech company Oracle, Silver Lake, and MGX, a technology fund based in the United Arab Emirates, with each owning 15%. ByteDance, TikTok’s parent company, will retain a 19.9% stake in the new U.S.-based venture. The remaining 30.1% will be held by current ByteDance investors, according to a company memo.

Now that these agreements are finalized, we’re fully committed to continuing to serve our users, creators, businesses, and the entire TikTok community worldwide, as stated by TikTok CEO Shou Zi Chew in a recent message.

This agreement resolves uncertainty about TikTok’s future. TikTok has become a leading social media platform globally and is a significant presence in Culver City.

For years, TikTok’s future in the U.S. was questionable due to lawmakers’ worries about its Chinese parent company, ByteDance. ByteDance was facing a potential U.S. ban unless it sold its American operations, following a new law that took effect in January. While former President Trump originally tried to ban TikTok, he later took actions allowing it to continue operating. In September, he signed an order detailing a new partnership agreement for the app.

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TikTok’s owner, ByteDance, was facing demands to sell its U.S. business or risk being banned in the country. This pressure stemmed from worries about the company’s connections to China and potential security risks.

TikTok plans to create a U.S.-based team to handle data protection, security checks on its algorithms, content monitoring, and software safety. According to a memo from CEO Shou Zi Chew, this team will be overseen by a board of seven people, with a majority being American citizens. Oracle will be the security partner, responsible for ensuring TikTok follows the agreed-upon U.S. national security requirements through regular checks and verification.

Larry Ellison, the CEO of Oracle, and his family are reportedly at the forefront of a potential bid to acquire Warner Bros. Discovery.

Oracle and Silver Lake both didn’t respond to requests for information. When asked about the deal, the White House directed inquiries to TikTok. Back in September, Donald Trump stated that China’s President Xi Jinping had given his approval.

In his executive order, Trump said these measures would shield Americans’ personal information from being misused and prevent foreign interference, while still letting the many Americans who use TikTok for entertainment, content creation, or business continue to do so.

Business

TikTok users are increasingly selling goods directly to viewers during long, live video broadcasts. While this type of ‘live shopping’ has been popular in China for several years, it’s just starting to gain traction in the United States.

The news should also be welcome for many creators and businesses who use TikTok to connect with their audience and customers.

Yasmine Sahide, a TikTok comedian with 2.4 million followers, expressed hope that the platform will remain independent and true to its original form. She also worries that changes could impact creators’ ability to earn money from their videos, which she believes would discourage many from continuing to create content.

Keith Lee, a popular food reviewer on TikTok with 17.3 million followers, anticipates changes to the platform’s algorithm. He expressed hope that he’ll still be able to connect with his audience as easily as he does now.

A lot of TikTok creators live in Southern California, near TikTok’s headquarters in Culver City. When TikTok’s success wasn’t guaranteed, many of these creators started sharing their videos on other platforms like YouTube and Instagram as a way to broaden their reach.

According to Ray Wang, a principal analyst at Constellation Research, the agreement is a clever approach to sidestep potential problems with ownership and data management.

If completed, this agreement would resolve a long-standing point of contention between China and the United States and suggest positive momentum in their overall discussions. However, it would also mean China’s leading private company would no longer have complete ownership of a popular American social media platform.

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As a TikTok user, I’ve heard a lot about how important the app’s algorithm is to making it so addictive and fun. Apparently, to address security concerns, ByteDance, TikTok’s parent company, is planning to license that core technology to a new U.S.-based TikTok company. This new company will then use that algorithm, along with data from American users, to build and secure a new system with help from Oracle. Basically, they’re rebuilding the ‘For You’ page, but keeping it safe and sound within the U.S.

Some experts wondered if the agreement truly resolves the main issues Congress raised about TikTok in the new law.

According to Jennifer Huddleston, a tech policy expert at the Cato Institute, recent executive orders have allowed the platform to continue operating, but they don’t address the bigger legal issues. These issues could affect other platforms down the line and also raise concerns about the power of the executive branch.

The fact that TikTok is still operating under these conditions doesn’t mean the original legal issues have been addressed.

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2025-12-19 21:02