ByteDance signs deal to sell over 80% of TikTok's US assets to avoid ban

ByteDance has signed a binding deal to shift control of TikTok's US operations to a new joint venture, a key step to avoid a ban and end years of uncertainty over the app

TikTok’s Chinese parent ByteDance has signed binding agreements to create a new joint venture that will take control of the app’s US operations, news agency Reuters reported. The move is a major step toward avoiding a ban in the United States and ends years of uncertainty over the future of the popular short-video platform.

 

The deal comes after long-running concerns in Washington about US national security and data protection linked to TikTok’s Chinese ownership.

 

Years of pressure over national security concerns

 

TikTok is used regularly by more than 170 million Americans. The controversy around the app began in August 2020, when President Donald Trump first tried to ban it, citing national security risks. That effort failed, but pressure on ByteDance continued under successive administrations.

 

 

Under a 2024 law, TikTok faced a ban unless its Chinese owners sold its US operations. In September, Trump delayed enforcement of the law until January 20 next year and said the proposed deal met divestment requirements.   

 

Ownership structure and valuation

 

The new company will be called TikTok USDS Joint Venture LLC. American and global investors, including Oracle, private equity firm Silver Lake and Abu Dhabi-based MGX, will hold 80.1 per cent of the new entity. ByteDance will retain a 19.9 per cent stake.

 

Vice President JD Vance said in September that the new US company would be valued at around $14 billion, lower than analyst estimates.

 

The agreement is expected to close on January 22.

 

Who controls TikTok’s US operations?

 

According to the White House, the new joint venture will operate TikTok’s US app. However, questions remain about ByteDance’s ongoing role and its business relationship with the new entity.

 

TikTok CEO Shou Zi Chew told employees that the joint venture would "operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance", according to a memo seen by Reuters.

 

Chew also said that TikTok’s global US entities would separately handle global product interoperability and certain commercial activities, including e-commerce, advertising and marketing.

 

Concerns over algorithm, Chinese influence

 

Some US officials and analysts remain sceptical. Rush Doshi, who served at the National Security Council under former President Joe Biden, said it was unclear whether TikTok’s algorithm had been transferred, licensed, or was still controlled from China, with Oracle only providing “monitoring".

 

Chinese media reports in September said ByteDance would continue to play a major operational role. A Chinese financial magazine reported that ByteDance planned to set up a US TikTok entity that would receive some revenue from the joint venture, Reuters reported.   

 

Board control and Oracle’s role

 

Under the agreement, ByteDance will appoint one of seven board members, while Americans will hold the majority of seats.

 

Oracle will act as the “trusted security partner”, responsible for auditing and compliance. TikTok said that Oracle would safeguard US user data, which will be stored in a secure cloud environment in the United States run by Oracle.

 

Role of billionaires and investors

 

Trump has close ties with Oracle CEO Larry Ellison. In September, he said investors including Michael Dell, Rupert Murdoch, and several “world-class investors” would be involved. It remains unclear whether Dell and Murdoch took part in the final agreement.

 

Republican Representative John Moolenaar, who chairs the House Select Committee on China, has said he plans to call the leadership of the new TikTok entity for a congressional hearing in 2026.

 

What lies ahead?

 

If completed as planned, the deal would end years of efforts to force ByteDance to divest TikTok’s US business. But scrutiny over control, data security, and China’s influence is likely to continue even after the joint venture begins operations.

 

(With agency inputs)