TL;DR
TikTok has agreed to divest part of its U.S. operations to a consortium led by Oracle, Silver Lake and MGX, creating a new U.S. joint venture that will run the app’s American business. The deal sets Oracle as the security partner, restricts ByteDance’s access to U.S. user data and the U.S. algorithm, and is scheduled to close on January 22, 2026, though valuation estimates for TikTok U.S. vary widely in reporting.
What happened
After years of political and legal pressure over user data and national-security concerns, ByteDance reached an agreement to transfer a portion of TikTok’s U.S. operations to a group of American investors. According to a memo reported by TechCrunch, Oracle, private equity firm Silver Lake and investment firm MGX together will hold 45% of the newly formed TikTok USDS Joint Venture LLC; ByteDance will retain nearly a 20% stake. Oracle is named as the trusted security partner and already provides cloud services and U.S. user data management for the app. The joint venture will be responsible for data protection, algorithm security, content moderation and software assurance. The memo and subsequent reporting say ByteDance will not have access to information about U.S. users or influence over the U.S. algorithm. Bloomberg reports that the current TikTok app will be discontinued in the U.S. and users will need to move to a new platform; the deal is set to close on January 22, 2026.
Why it matters
- Changes ownership and control of TikTok’s U.S. operations, altering who manages U.S. user data and platform governance.
- Oracle’s role as a trusted security partner signals tighter operational oversight and attempts at algorithm separation.
- U.S. users may face an app transition if the current TikTok is discontinued and must move to a new U.S.-based platform.
- The agreement sets a potential precedent for how foreign-owned apps are handled amid national-security concerns.
Key facts
- Investor group named in a TechCrunch memo: Oracle, Silver Lake and MGX.
- The consortium will collectively hold 45% of TikTok’s U.S. operation; ByteDance will retain nearly a 20% stake.
- New corporate vehicle: TikTok USDS Joint Venture LLC to oversee U.S. operations, including data and algorithm security.
- Oracle designated as the trusted security partner; it already provides cloud services and manages U.S. user data for TikTok.
- A White House official has said Oracle would replicate and secure a new U.S. version of the algorithm; U.S. owners could lease the algorithm from ByteDance, with Oracle retraining it.
- ByteDance will not have access to information about U.S. users or influence over the U.S. algorithm, per reporting.
- Deal closing date reported as January 22, 2026.
- Valuation figures differ in reporting: some sources cite an approximate $14 billion valuation for TikTok U.S., while other coverage has suggested the platform’s valuation could rise toward $60 billion.
What to watch next
- January 22, 2026: the scheduled closing date for the deal and any last-minute regulatory or legal developments.
- How Oracle’s replication and retraining of the U.S. algorithm are implemented and audited under the joint-venture terms.
- Bloomberg’s report that the current TikTok app will be discontinued in the U.S. and users will need to migrate to a new platform — specifics of that transition are not confirmed in the source.
Quick glossary
- Divest: To sell off or transfer ownership of part of a company’s assets or operations.
- Joint venture: A business entity created by two or more parties to undertake a specific commercial activity together.
- Trusted security partner: An organization designated to perform security functions, audits and compliance checks for another entity’s operations.
- Algorithm (in social apps): A set of computational rules used to rank and recommend content to users based on signals like behavior and engagement.
Reader FAQ
Who will own TikTok’s U.S. business?
A consortium including Oracle, Silver Lake and MGX will hold 45% of the U.S. operation; ByteDance will retain nearly a 20% stake, managed under TikTok USDS Joint Venture LLC.
Will ByteDance keep access to U.S. user data?
Reporting says ByteDance will not have access to U.S. user information or influence over the U.S. algorithm.
When does the deal take effect?
The agreement is reported to close on January 22, 2026.
Do U.S. users need to reinstall or switch apps?
Bloomberg reported the current app will be discontinued in the U.S. and users will need to transition to a new platform, but details about that shift are not confirmed in the source.
TikTok, owned by the Chinese company ByteDance, has been at the center of controversy in the U.S. for four years now due to concerns about user data potentially being accessed…
Sources
- Here’s what you should know about the US TikTok deal
- What the deal between TikTok and US investors means for users
- What to Know About the Deal Giving American Investors a …
- TikTok has signed the deal to spin off its US entity with …
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