TikTok has finalized an agreement to sell a sufficient stake in its US operations to comply with the country’s divest-or-ban law, allowing the platform to continue operating in the United States. The deal was first reported by Axios, The Hollywood Reporter, and CNBC, and was confirmed in a memo from CEO Shou Zi Chew to employees on Thursday. TikTok is targeting January 22, 2026, as the closing date for the transaction, which establishes a new entity called TikTok USDS Joint Venture LLC. This move comes after TikTok briefly went offline in the US earlier this year due to unmet divestment requirements, and follows multiple extensions granted by US authorities to finalize a compliant structure.
Under the terms of the agreement, ownership of TikTok USDS will be shared among new American investors, existing ByteDance investors, and ByteDance itself. A consortium of new investors, including Oracle, Silver Lake, and MGX, will hold 50% of the joint venture, with each taking a 15% stake. Affiliates of certain existing ByteDance investors will retain 30.1%, while ByteDance will maintain a 19.9% ownership interest. This structure ensures that majority control rests with American stakeholders, meeting requirements outlined in an executive order signed on September 25, 2025.
The memo also details the operational and data governance responsibilities of the US joint venture. TikTok USDS will have a seven-member board of directors, with a majority of members being American, granting the entity authority over data protection, algorithm security, content moderation, and software assurance for US users. The platform plans to retrain its content recommendation algorithm using US-based data to prevent outside manipulation. Sensitive US user data will be securely stored in a cloud operated by Oracle, which will serve as the trusted security partner, auditing compliance with national security requirements and ensuring that all operations meet regulatory standards.
Once the transaction is completed, TikTok USDS will function independently from ByteDance’s global operations while leveraging the existing TikTok US Data Security organization. It will have exclusive authority to provide assurances on data, content, and software security for American users. TikTok’s global US entities will continue to manage product interoperability and certain commercial functions, including e-commerce, advertising, and marketing. The company emphasized that these changes will not impact advertisers or the user experience for its more than 170 million American users. Regulatory approval is required for the transaction, which is expected to close within 120 days of the executive order.
By creating TikTok USDS Joint Venture LLC, the platform aims to address US government concerns while maintaining its operational footprint and user engagement. The divestment agreement represents a critical step in stabilizing TikTok’s future in the United States, ensuring compliance with federal regulations, and reinforcing data security and content oversight. As the closing date approaches, attention will remain on the successful implementation of this joint venture and the platform’s ability to continue offering its services without disruption for millions of US users.
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