In order to avoid a national ban on the well-known video-sharing platform, TikTok has finalized a $14 billion deal to create a US subsidiary.
The US private equity firm Silver Lake, the Abu Dhabi-based artificial intelligence firm MGX, and Oracle, the massive technology company co-founded by US President Donald Trump ally Larry Ellison, are all part of the new ownership structure.
Each of the three companies will own 15% of the US joint venture. ByteDance, the Beijing-based parent company of TikTok, will keep a little less than 20% of the company, and Michael Dell’s investment firm, the Dell Family Office, is also taking part.
The deal comes after Congress passed a law in April 2024 that mandated that TikTok be sold to US owners by January 19, 2025, or risk being banned due to national security concerns regarding the app’s connections to China. While negotiations were going on, President Trump repeatedly postponed enforcing the ban. In September, he signed an executive order approving the deal’s framework and giving the parties more time to finalize terms.
The agreement is in line with an internal memo that TikTok CEO Shou Zi Chew distributed last month, stating that the deal would be finalized by Thursday.
TikTok’s US operations will operate independently under the agreement, with a seven-member board in charge. Shou Zi Chew, Oracle Executive Vice President Kenneth Glueck, Timothy Dattels, senior adviser at TPG Global, Mark Dooley, managing director at Susquehanna International Group, Egon Durban, co-CEO of Silver Lake, Raul Fernandez, CEO of DXC Technology, and David Scott, chief strategy and safety officer at MGX, will all be on the board.
Adam Presser, TikTok’s head of operations and trust and safety, will serve as chief executive officer of the new joint venture.
Trump welcomed the deal in a post on Truth Social, describing it as a win for American investors and the platform’s future in the country. He said Chinese President Xi Jinping had ultimately approved the agreement, thanking him for cooperating on the matter.
While Trump has previously described the deal as a “qualified divestiture” that fully severs ByteDance’s control over TikTok, Chinese officials have offered a more cautious response, saying any agreement must comply with Chinese laws and balance the interests of all parties.
Lawmakers who have raised national security concerns about TikTok said they would continue to scrutinise the agreement to ensure compliance with US law. However, some signalled a willingness to accept assurances that the deal addresses concerns over surveillance and content manipulation.
Vice President JD Vance said the US entity would have control over TikTok’s algorithm, a central issue in the negotiations. He noted that algorithmic control was essential to meeting national security requirements.
According to the company, the US platform will retrain and update its algorithm using American user data, with Oracle hosting and managing the system within its US-based cloud infrastructure.
Critics, however, remain sceptical. Michael Sobolik, a senior fellow at the Hudson Institute, said the agreement still raised questions about China’s influence over the platform, arguing that Beijing may have emerged with significant leverage despite the divestment.
The deal is expected to keep TikTok operational in the US while reshaping its governance and data controls under American oversight.