TikTok signs agreement to sell US operations to Oracle and Silver Lake-backed group

New Delhi: TikTok has signed an agreement to sell its US business to a group of American investors including Oracle, Silver Lake and MGX, a move that allows the video-sharing platform to continue operating in the United States.

The deal is expected to close on January 22, according to an internal memo seen by The Associated Press. TikTok chief executive Shou Zi Chew told employees in the memo that ByteDance and TikTok had signed binding agreements with the three investors.

Under the proposed structure, half of the new TikTok US joint venture will be owned by a consortium of investors. Oracle, Silver Lake and MGX will each hold a 15% stake. A further 30.1% will be held by affiliates of existing ByteDance investors, while China-based ByteDance will retain a 19.9% holding, according to the memo.

The US venture will have a new seven-member board of directors, with a majority of American members. It will also be subject to terms that “protect Americans' data and US national security,” the memo said.
US user data will be stored locally through systems operated by Oracle.

TikTok’s algorithm, described in the memo as “the secret sauce that powers its addictive video feed,” will be retrained using US user data to “ensure the content feed is free from outside manipulation.” The US-based entity will also oversee content moderation and policy decisions within the country.

The agreement brings to a close years of uncertainty surrounding TikTok’s future in the United States.

Earlier, overwhelming bipartisan majorities in Congress had passed legislation, later signed into law by President Joe Biden, that would have banned TikTok in the US unless it separated from its Chinese parent company. The platform was set to shut down by the law’s January 2025 deadline.

For several hours, it did. However, on his first day in office, President Donald Trump signed an executive order allowing TikTok to continue operating while his administration pursued a sale.

Three further executive orders followed, extending the deadline despite the absence of a clear legal basis. The second extension came in April, when White House officials believed they were close to finalising a spin-off structure with US ownership. That effort collapsed after China withdrew following Trump’s announcement of new tariffs.

A third extension was issued in June, followed by another in September. Trump said the move would allow TikTok to continue operating in the United States in a manner that addressed national security concerns.