TikTok has finalized a deal with Oracle and two other investors that will allow the popular social video platform to continue its business in the United States
The deal is expected to close on January 22, and will be 50% owned by a new investor consortium that includes tech giant Oracle, Silver Lake, and MGX, a UAE-based technology fund (each holding 15%). The rest of the group consists of TikTok’s parent company ByteDance, which owns 19.9%, and affiliates of existing ByteDance investors, which own 30.1%, TikTok said in a memo to employees.
“With these agreements in place, our focus must remain where it has always been — firmly on delivering services to our users, creators, companies, and the global TikTok community,” TikTok CEO Xu Zhiqiu wrote in his note.
TikTok’s future in the United States has been uncertain for many years amid security concerns among lawmakers over parent company ByteDance’s ties to China. ByteDance has been under pressure to divest its ownership of the app’s US operations or face a nationwide ban, due to a law passed by Congress that took effect in January. President Trump signed orders allowing TikTok to continue operating in the country, and in September he signed an executive order outlining the new joint venture.
The project, which will oversee US data protection, algorithm security, content moderation and software assurance, will be governed by a board of directors made up of seven mostly American members, Chiu said in his memo. Oracle will be the security partner responsible for “auditing and verifying compliance with the agreed-upon national security terms,” Chiu wrote.
Oracle CEO Larry Ellison is also party to the bid to buy Warner Bros. Discovery.
Oracle did not return a request for comment. Silver Lake declined to comment. On Thursday, the White House referred questions about the deal to TikTok. In September, Trump said Chinese President Xi Jinping had approved the deal.
“These safeguards will protect the American people from misuse of their data and the influence of a foreign adversary, while also allowing millions of American viewers, creators, and businesses that rely on TikTok to continue using it,” Trump stated in his executive order.
The deal removes the shadow it has cast on the future of TikTok, which has become one of the most dominant social media platforms today.
This announcement will also come as a relief to some creators and businesses that rely on TikTok to entertain and reach fans and customers.
“I hope this stays true to the platform and the independence we get from it,” said Yasmin Shahida, who posts comedy videos on TikTok and has 2.4 million followers. “I hope we can monetize our videos in the same way, because without that, I think a lot of people will leave or feel uninspired.”
Keith Lee, a TikTok creator who posts food videos, said he expects the algorithm will change. “I just hope we can still stay connected with our community and reach the audience in the same way as before,” said Lee, who has 17.3 million followers.
Many TikTok creators are located in Southern California, near TikTok’s office in Culver City. Over the years when TikTok’s future seemed uncertain, some of these creators diversified their businesses, publishing their content on other platforms like YouTube and Instagram.
“It’s a smart way to avoid ownership and data issues,” Ray Wang, principal analyst at Constellation Research, said of the deal.
If the agreement is reached in its final form, it would remove an ongoing problem in relations between Beijing and Washington and signal progress in the broader talks. But it would also deprive China’s most valuable private company of full control of the American social media phenomenon.
ByteDance’s coveted algorithms are a key component of TikTok’s business. Under the deal proposed by Washington, ByteDance would license its AI recommendation technology to a newly created US TikTok entity, which would use the algorithm to retrain a new system secured by Oracle, according to Bloomberg. The algorithm will be retrained on US user data by the US joint venture, according to TikTok.
Some industry observers questioned whether the deal addresses the larger concerns surrounding TikTok in the law passed by Congress.
“While these executive orders have positively allowed the platform to operate and maintain a place for expression, they do not resolve fundamental concerns about the law, which could be applied to other platforms in the future and raise questions about executive authority,” said the Cato Institute Senior Fellow in Technology Policy. Jennifer Huddleston said In a statement.
“Just because TikTok remains available under these orders does not mean that political concerns about the underlying law have been resolved.”
Bloomberg contributed to this report.