ByteDance Signs Deal to Divest TikTok U.S. Stake, Averting National Ban

ByteDance, the Chinese parent company of TikTok, has signed a binding agreement with a consortium of international and U.S.-based investors to restructure its American operations. The move is a strategic bid to bypass a looming national ban and address long-standing national security concerns.

TikTok CEO Shou Zi Chew confirmed the development in an internal memo to employees on Thursday, stating that the agreement marks a "new chapter" for the platform’s 170 million U.S. users. The deal is expected to be finalized by January 22, 2026.

Restructuring the Ownership
Under the terms of the agreement, a new joint venture will be established to manage TikTok's business within the United States. The ownership will be redistributed to dilute ByteDance's direct control:

International Consortium: Oracle, Silver Lake, and Abu Dhabi-based MGX will each acquire a 15% stake, totaling a 45% collective share.

ByteDance: The parent company will retain a minority stake of 19.9%.

Affiliated Investors: The remaining 30.1% will be held by existing ByteDance investment partners.

The Algorithm and Data Security
A central pillar of the deal involves the platform's proprietary recommendation engine. U.S. tech giant Oracle has secured a license to the TikTok algorithm. As part of the "Project Texas" initiative, the algorithm will be retrained specifically on U.S. user data to ensure it remains insulated from foreign state influence.

The White House noted that Oracle’s involvement was pivotal, citing the company’s ability to provide a secure cloud infrastructure. Oracle co-founder Larry Ellison, a prominent figure in Republican political circles, has been a key advocate for this "American-led" solution.

Political Context and Geopolitics
The agreement follows a turbulent period of legislative pressure. In April 2024, the Biden administration signed a bill requiring ByteDance to sell TikTok or face removal from U.S. app stores by early 2025. However, the timeline was extended several times following personal intervention by President Donald Trump.

Trump reportedly discussed the framework with Chinese President Xi Jinping during recent diplomatic talks. Despite the breakthrough, critics remain. Senator Ron Wyden (D-Ore.) voiced concerns on Thursday, stating, "This arrangement does not go far enough in protecting the fundamental privacy of American citizens."

Economic Impact
For the 7 million small businesses in the U.S. that rely on TikTok for commerce, the deal provides much-needed stability. Content creators, who have campaigned extensively in Washington to "Save TikTok," have expressed relief that the platform's monetization models will remain intact under the new management.

"TikTok has become a primary vehicle for American entrepreneurship," said Alvin Greylin, a lecturer at MIT. "This deal shows that TikTok is now a major bargaining chip in the broader U.S.-China trade and technology relationship."