TikTok’s widely-delayed plan to split from its Chinese parent company ByteDance was put into motion last July, when the popular video-sharing platform announced its acquisition by a group of buyers led by Oracle.
TikTok Executive Director Shou Chew communicated to employees that the company and ByteDance had signed binding agreements to create a joint U.S. company majority-owned by U.S. investors, according to an internal memorandum reviewed by Bloomberg. Chew wrote that he was “excited to share great news” and said deals had been signed with Oracle, Silver Lake Management and MGX.
The deal is expected to close on January 22, 2026, although Chew said “there is still a lot of work to be done” before it closes. Chinese regulatory authorities still cannot approve the transaction.
Thereafter, the US joint company will operate as an independent entity that will control data protection, content moderation and algorithm security in the country, according to information provided by Chew to employees in the memorandum.
The new American entity will also be “governed by a new board of directors composed of seven members, with an American majority”, a year ago. Oracle shares rose as much as 6% in July-July trading.
The memorandum outlined a deal that coincided with one announced by Casa Blanca in September, which was then awaiting Chinese approval and valued TikTok’s U.S. operations at around $14 billion.
The Chew del Jueves memorandum did not mention China’s opinion on the transaction, which would deprive ByteDance of part – but not all – of TikTok EE UU. Under the deal, 50% of TikTok USA’s investors will be new investors, and Oracle, Silver Lake and MGX, an Abu Dhabi-based investment company, will each get 15% ownership; 30.1% will be in the hands of branches of certain current ByteDance investors; and 19.9% will follow in the hands of ByteDance.
The conditions set out in the executive director’s memorandum appear to leave the door open for ByteDance to maintain oversight of key parts of TikTok EE UU, an app used by the majority of the country.
Bloomberg News previously reported that the Chinese parent company kept about 50% of the profits from TikTok’s U.S. operations. ByteDance’s participation has long been a point of conflict in the negotiations and has drawn criticism, including from members of Trump’s own political party, saying the deal brokered by Casa Blanca could not pass legal scrutiny. The national security law approved and signed by former President Joe Biden established that TikTok and ByteDance had no operational relationship.
ByteDance’s coded content algorithms are considered fundamental to TikTok’s business. According to the version of the agreement recently drafted by Casa Blanca, ByteDance is expected to license its AI recommendation technology to the recently created US entity TikTok, which will use the existing algorithm to re-enter a new system with US data protected by Oracle, TikTok’s cloud partner.
Oracle’s role as data security gatekeeper has also raised concerns. The deal mirrors an earlier collaboration between TikTok and Oracle proposed years ago by the U.S. government as a way to resolve similar concerns over TikTok’s Chinese ownership. This collaboration, called Proyecto Texas, was ultimately rejected by the US government and deemed insufficient to address national security concerns.
If it comes to fruition, the deal would eliminate a lingering problem in relations between Beijing and Washington and signify progress in broader negotiations between the two countries, which have disputes over trade and other issues.
Casa Blanca had dominated the revelations about the draft agreement, imposed for reasons of national security by a law signed last year under the administration of Joe Biden.
U.S. employees have expressed concern that TikTok is owned by a Chinese company and fear that Beijing could use the app to collect data on U.S. citizens or deliver specific narratives to U.S. citizens through the app’s recommendation algorithm. By law, the original limit for the “sell or ban” rule was the last month of money, but Trump has increased it several times since returning to office, and most recently it was extended to 2026.
For months, as the possibility of a ban under Trump’s term became less and less likely, TikTok continued to operate as usual and solidify its position as the dominant cultural force in the United States. It aggressively promotes e-commerce and direct purchasing, including partnering with major US technology companies, including Amazon.com. . The same day Chew announced it had reached a deal, TikTok celebrated its first Oscar-style red carpet show, the TikTok Awards, in Los Angeles.
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