TikTok finalized an arrangement backed by President Donald Trump to divest its US assets for establishing a new entity with a consortium primarily of American investors, CEO Shou Zi Chew informed staff in a Thursday memorandum.
While the transaction isn’t yet complete, this development moves TikTok one stage closer to securing a lasting US presence. This follows last year’s legislation mandating the separation of the app’s American version from parent company ByteDance or facing a US prohibition. Trump repeatedly postponed enforcing the legislation while striving to reach an agreement to transfer supervision of the popular application to Americans.
“We have entered into agreements with investors regarding a new TikTok US joint venture, which will enable over 170 million Americans to continue discovering a world of infinite possibilities as part of an important global community,” Chew stated in his note, which CNN obtained. An individual familiar with the firm verified the memo’s veracity.
Axios was the first outlet to report on the pact.
TikTok declined to comment on the memorandum.
TikTok is slated to appear in the iPhone app store on January 8, 2025.
Under the terms, the US TikTok application will be governed by the new joint venture, which will see 50% ownership held by an investor consortium comprising tech firm Oracle, private equity firm Silver Lake, and UAE-backed investment firm MGX. Slightly over 30% of the joint venture will belong to “affiliates of certain existing ByteDance investors,” with 19.9% remaining with ByteDance, according to Chew’s memo.
Chew pointed out in his note that significant effort remains before the deal is finalized, but the parties are nearing completion by January 22, 2026. Both ByteDance and TikTok have consented to the transaction’s stipulations, he added.
The Trump administration announced in September that it had reached an understanding with China to hand over stewardship of TikTok’s US operations to a group predominantly of American investors. The President signed an executive order affirming the agreement as a qualified divestiture and paused enforcement of the sale ban legislation for 120 days to permit the deal’s finalization.
The US statute, which technically took effect in January, bars TikTok if ByteDance does not sell about 80% of its US holdings to non-Chinese investors.
The fresh organization will retrain TikTok’s algorithm on US user data, and Oracle will oversee the custody of American data, as White House representatives previously indicated. The American joint venture will also manage content moderation for US users. However, Chew’s memo suggests that the global TikTok entity, overseen by ByteDance, will persist in managing e-commerce, advertising, and marketing for the new American platform.
The transaction is anticipated to necessitate approval from the Chinese government before it can be concluded. Although Trump asserted that Chinese President Xi Jinping supported the arrangement, Beijing has officially not confirmed its endorsement. The agreement is also expected to require authorization from regulators in both nations.
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