• TikTok announces the formation of a joint venture to satisfy U.S. regulatory concerns.
• American investors Oracle, Silver Lake, and MGX will control 80.1% of the new entity.
• The move ends years of uncertain legal status for TikTok in the U.S., allowing it to operate freely.
• ByteDance, TikTok's Chinese parent company, will retain a minimal 19.9% stake in compliance with U.S. laws.
• The newly formed venture will focus on U.S. data protection and algorithm security.

TikTok has signed a binding agreement to form a joint venture with American investors, marking a significant step toward securing its operations in the U.S. as it faces ongoing regulatory scrutiny. CEO Shou Zi Chew announced the deal, stating that it will allow TikTok to continue serving over 170 million American users without the threat of a government-enforced ban on the app, which could have resulted from its ownership structure under Chinese parent company ByteDance. The deal is set to close on January 22, 2026, according to an internal memo obtained by various media outlets, including South China Morning Post and India Times.

The joint venture will be primarily owned by a group of American investors, including Oracle and Silver Lake, with each holding 15% alongside Abu Dhabi-based MGX, which will also control a 15% share. ByteDance's stake will be capped at 19.9%, aligning with U.S. law that mandates minimal foreign ownership in such ventures, reports ABC News and Channel News Asia.

This arrangement is viewed as a critical response to national security concerns regarding user data and the control of TikTok's algorithm, which has been a focal point in the ongoing debate about the app's Chinese ties. TikTok's data security practices will be governed by a majority-American board of directors. Oracle is designated as the "trusted security partner," ensuring compliance and confidentiality of U.S. user data stored on its platforms, according to information from ABC News and Le Monde.

Despite this progress, questions remain about the deal's implications for TikTok's core functionality, particularly the algorithm that drives content recommendations. It is designed to be retrained on U.S. user data to preclude any potential manipulation by outside forces, as outlined in the memos obtained from various sources including India Times and Africa News.