TikTok’s Chinese parent company, ByteDance, has reached a deal with the Trump administration to keep the popular social media app from being banned in the United States. The agreement would create a new U.S.-based joint venture controlled mostly by American investors.
What we know about the deal
Those investors are expected to include tech giant Oracle, private equity firm Silver Lake, and United Arab Emirates-based investment company MGX. The agreement still needs final approval, with a target closing date of Jan. 22, according an internal memo from TikTok CEO Shou Chew obtained by Axios.
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According to the memo, Oracle, Silver Lake and MGX will each own 15% of the new joint venture. Meanwhile, ByteDance will keep 19.9% and affiliates of existing ByteDance investors will get 30.1%,
The 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,” the memo reads.
Why the change
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33% of U.S. adults use TikTok. More than half of those users say the app is where they regularly get their news.
The move comes after Congress passed a law last year requiring TikTok to be sold or shut down in the U.S., citing national security concerns over Chinese ownership and access to users personal data.
The deadline has been pushed back multiple times and this new deal is designed to satisfy those requirements by shifting control away from ByteDance.
In September, President Donald Trump signed an executive order approving a deal to keep TikTok operational in the U.S. while placing it under majority American control. The order gave TikTok and stakeholders 120 days to finalize the deal.
