TikTok strikes venture deal to avert US ban threat
Social media platform says new ownership structure would allow it to continue operating in the United States, according to media reports.
TikTok has said that it had signed a joint venture deal with investors that would allow the company to continue operating in the United States and avert a potential ban linked to its Chinese ownership, according to US media reports.
Citing an internal memo obtained by Bloomberg and Axios, TikTok chief executive Shou Chew told employees that the agreement had been approved by the company and its Chinese parent, ByteDance.
The new venture would include Oracle, Silver Lake and MGX as major investors.
Oracle’s executive chairman and founder Larry Ellison is a long-time ally of US President Donald Trump.
Chew said one-third of the US-based venture would be held by existing ByteDance investors, while nearly 20 percent would remain with ByteDance itself, the maximum stake permitted for a Chinese company under US law.
Deal follows US ban legislation
The arrangement follows legislation passed under former president Joe Biden that required ByteDance to sell TikTok’s US operations or face a ban in its largest market.
US officials, including Trump during his first term, have warned that China could use TikTok to collect data on Americans or exert influence through its algorithm.
Trump has repeatedly delayed enforcement of the law through executive orders, most recently extending the deadline until January.
The agreement largely confirms a White House announcement made in September, which said a deal had been reached that would meet the requirements of the 2024 law.
"Upon the closing, the US joint venture will operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance," Chew said in the memo.
He added that TikTok Global’s US entities would oversee global product interoperability and certain commercial activities, including e-commerce, advertising and marketing.
The memo did not clarify whether the global unit would continue to be owned by ByteDance.
The document marks the first indication that TikTok has formally agreed to the arrangement announced by the Trump administration, which would require approval from the Chinese government to proceed.