TikTok signs deal to sell US unit to 3 investors

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TikTok has signed a deal to sell its U.S. business to three American investors — Oracle, Silver Lake and MGX — ensuring the popular social video platform can continue operating in the United States.

The deal is expected to close on Jan. 22, according to an internal memo seen by The Associated Press. CEO Shou Zi Chew told employees in the memo that ByteDance and TikTok have signed binding agreements with the three investors.

Who will own TikTok's U.S. business?

What we know:

Half of the new TikTok U.S. joint venture will be owned by a consortium of investors — among them Oracle, Silver Lake and MGX will each hold a 15% share. Another 30.1% will be held by affiliates of existing ByteDance investors and 19.9% will be retained by the China-based ByteDance, according to the memo.

The U.S. venture will have a new, seven-member majority-American board of directors, the memo said. It will also be subject to terms that "protect Americans’ data and U.S. national security."

U.S. user data will be stored locally in a system run by Oracle.

TikTok’s algorithm — the secret sauce that powers its addictive video feed — will be retrained on U.S. user data to "ensure the content feed is free from outside manipulation," the memo said. The U.S. venture will also oversee content moderation and policies within the country.

TikTok's uncertainty

The backstory:

The deal marks the end of years of uncertainty about the fate of the popular video-sharing platform in the United States. After wide bipartisan majorities in Congress passed — and President Joe Biden signed — a law that would ban TikTok in the U.S. if it did not find a new owner in the place of China’s ByteDance, the platform was set to go dark on the law’s January 2025 deadline. For a several hours, it did. But on his first day in office, President Donald Trump signed an executive order to keep it running while his administration tries to reach an agreement for the sale of the company.

Three more executive orders followed, as Trump, without a clear legal basis, continued to extend the deadline for a TikTok deal. The second was in April, when White House officials believed they were nearing a deal to spin off TikTok into a new company with U.S. ownership that fell apart after China backed out following Trump’s tariff announcement. The third came in June, then another in September, which Trump said would allow TikTok to continue operating in the United States in a way that meets national security concerns.