TikTok has officially announced a significant agreement to transfer its U.S. operations to a newly formed entity. This deal, supported by President Donald Trump, aims to create a joint venture largely controlled by American investors. CEO Shou Chew informed employees about the development via a memo on Thursday, underscoring the move as integral to securing TikTok’s long-term presence in the U.S.
TikTok’s Transition to American Ownership
The decision comes in light of recent legislation that mandated the separation of TikTok from its parent company, ByteDance, to avoid a potential ban in the United States. This law came into force due to national security concerns. Although the transaction is still pending completion, TikTok is one step closer to finalizing the agreement.
Key Details of the Agreement
- Joint venture ownership includes major investors: Oracle, Silver Lake, and MGX.
- The new entity will be 50% owned by the consortium of investors.
- Approximately 30% will be held by affiliates of current ByteDance investors.
- ByteDance retains a 19.9% stake.
Chew noted in his memo that while more efforts are needed to finalize the deal, the target completion date is set for January 22, 2026. The U.S. joint venture will specifically control the American version of TikTok while managing user data and content moderation.
Regulatory and Governmental Approval
The deal requires approval from both the Chinese government and American regulators before it can officially close. While Trump stated that Chinese President Xi Jinping supports the arrangement, there has yet to be any formal confirmation from Beijing.
In summary, this joint venture not only aims to preserve TikTok’s operation in the U.S. but also to align with legal frameworks that address security and ownership concerns related to the popular app. Approximately 170 million American users will continue to have access to TikTok as part of this vital transition.
