What the deal between TikTok and US investors means for users
Social media giant TikTok struck an agreement to put its U.S. operations under the majority control of U.S. investors, according to an internal memo sent by TikTok CEO Shou Chew and obtained by ABC News.
The move paves the way for the China-based platform to escape legal peril months after a ban was set to rid it from app stores.
“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community,” Chew said in the memo obtained late Thursday.
Still, Chew acknowledged, there remains “more work to be done” as the firm moves toward completion of the sale next month.
Axios first reported on the deal signing.
Here’s what to know about key details of the TikTok deal, what it means for the platform’s users and what comes next as officials race to keep the app operating in the U.S.
What are the terms of the TikTok deal?
The deal seeks to comply with an executive order signed by President Donald Trump in September, which ensured American investors would enjoy majority ownership of TikTok’s U.S. operations, while China-based owner ByteDance would retain less than 20% of the firm.
Under the agreement, TikTok will form a new U.S. joint venture controlled mostly by American investors that include software giant Oracle Corporation and private equity firm Silver Lake, each of which will retain 15% ownership of the new company, the memo said. MGX, an investment firm based in the United Arab Emirates, will also hold a 15% stake in the venture.
Oracle and Silver Lake declined to comment.
The remaining share of the company will be controlled by ByteDance and its affiliated investors, with ByteDance retaining 19.9% of the firm, according to the memo.
The deal also establishes a seven-member, majority-American board of directors for the venture, the memo said, putting the agreement in compliance with another stipulation of the executive order signed by Trump.
What does the TikTok deal mean for users?
Scrutiny has centered on the fate of TikTok's algorithm, a proprietary formula that fuels the attention-grabbing social media platform.
In September, Trump officials said an eventual TikTok sale would provide new U.S. owners with control over the algorithm.
"The U.S. company will have control over how the algorithm pushes content to users," Vice President JD Vance said in the Oval Office at the time. "We want the business to make decisions on content based on the interests of the business and based on the interests of users."
The deal this week appeared to grant the newly formed company some control over the algorithm, but the precise details remained unclear.
Under the agreement, the U.S. joint venture will retrain “the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation,” Chew said in the memo.
Even more, the venture will retain “ultimate decision-making authority for reviewing and approving all content moderation and related policies within the United States,” Chew added.
Another key sticking point has focused on the security of customer data. After the deal takes effect, U.S. user data will “be stored in a trusted and secure cloud environment in the United States run by Oracle,” the memo said.
The plan appears to resemble a solution previously proposed by TikTok called “Project Texas,” in which the company would keep all data on U.S. users within the country through a partnership with Oracle.
What's next in the effort to avert a TikTok ban?
China has remained mum about whether it approves of a TikTok sale, despite assurances from Trump in September that the Chinese government had agreed to the sale.
When asked about the deal at a press conference on Friday, Chinese foreign ministry spokesperson Guo Jiakun declined to offer further guidance. “I’d refer you to competent authorities for anything specific. China’s position on TikTok is consistent and clear,” Guo said.
In theory, China could still prevent the deal from being completed as planned, throwing a wrench into the fate of TikTok, some experts previously told ABC News.
It also remains uncertain whether the terms of the deal comply with the ban signed by Congress last year.
The ban granted TikTok a 270-day window to cut its ties with China-based parent company ByteDance or face a ban. Trump delayed the ban multiple times, giving TikTok a reprieve as the White House negotiated a sale.
Until the full terms of the agreement are known, the deal could still fall short of the divestment requirements outlined in the law, though they afford Trump wide latitude to determine whether such standards have been met, some experts previously told ABC News.
In the memo, Chew said additional details would be forthcoming. The executive order signed by Trump in September delayed the TikTok ban for additional 120 days, allowing for the closure of an agreement no later than Jan. 23, 2026. Chew aims to complete the deal a day earlier, the memo said.
ABC News' Soo Youn contributed to this report.
