Chinese tech giant ByteDance has officially signed binding agreements to divest over 80% of TikTok's US operations to a group of American and global investors, TikTok CEO Shou Zi Chew confirmed on December 18. The deal is expected to close on January 22.
The consortium, led by Oracle, Silver Lake, and MGX, has formed a new entity called TikTok USDS Joint Venture LLC. Under this agreement, 50% of the US venture will be owned by the entity, with each company holding a 15% stake, while the final third will belong to existing ByteDance investors with US ties.
ByteDance will retain nearly 20% of the business. The deal aims to prevent the app from being banned in the US, a move that would have required TikTok’s full divestiture over national security concerns.
"We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community," Chew wrote in a widely-reported internal memo.
"Your efforts keep us operating at the highest level and will ensure that TikTok continues to grow and thrive in the U.S. and around the world. With these agreements in place, our focus must stay where it’s always been—firmly on delivering for our users, creators, businesses and the global TikTok community," he added.
The deal ensures TikTok complies with a new US law that bans apps from operating in the country if more than 20% of their ownership is held by a "foreign adversary." The law initially took effect on January 19, 2025.
Earlier this year, US President Donald Trump had signed several executive orders to delay the ban while his administration brokered the deal to transfer TikTok’s US operations to American investors.
For marketers, a forced ban in the US would have likely pushed billions in short-form ad budgets towards competitors such as Meta, YouTube, and Snapchat. The move would have driven up ad prices and squeezed smaller businesses that lean on TikTok’s lower-cost reach and creator ecosystem.
TikTok's US divestiture is part of a broader move to regulate big tech, as governments show greater interest in restructuring dominant platforms. Google is facing a potential break up of its adtech business following a judge's ruling that it had illegally monopolised key ad buying tools.
Meanwhile, Meta recently won a lawsuit against the Federal Trade Commission, which sought to spin off WhatsApp and Instagram. The judge found Meta did not hold a social media monopoly.
