TikTok owner signs join venture agreements to avoid US ban

TikTok’s Chinese owner ByteDance has signed binding agreements with US and global investors for the majority of its business in America, TikTok’s boss told employees on Thursday.

Half of the joint venture will be owned by a group of investors, including Oracle, Silver Lake and the Emirati investment firm MGX, according to a memo sent by chief executive Shou Zi Chew.

The deal, which is set to close on 22 January, would end years of efforts by Washington to force ByteDance to sell its US operations over national security concerns.

It is ​line with a deal unveiled in September, when US President Donald Trump delayed the enforcement of a law that would ban the app unless it was sold.

In the memo, TikTok said the deal will enable “over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community”.

Under the agreement, ByteDance will retain 19.9% of the business, while Oracle, Silver Lake and Abu Dhabi-based MGX will hold 15% each.

Another 30.1% will be held by affiliates of existing ByteDance investors, according to the memo.

The White House previously said that Oracle, which was co-founded by Trump supporter Larry Ellison, will license TikTok’s recommendation algorithm as part of the deal.

The deal comes after a series of delays.

In April 2024, during President Joe Biden’s administration, the US Congress passed a law to ban the app over national security concerns, unless it was sold.

The law was set to go into effect on 20 January 2025 but was pushed back multiple times by Trump, while his administration worked out a deal to transfer ownership.

Trump said in September that he had spoken on the phone to China’s President Xi Jinping, who he said had given the deal the go ahead.

The platform’s future remained unclear after the leaders met face to face in October.

The White House referred the BBC to TikTok when contacted for comment.

Oracle and Silver Lake declined to comment. The BBC has contacted MGX for comment.

The deal drew critiques from Senate Democrat Ron Wyden of Oregon, who said it wouldn’t do “a thing to protect the privacy of American user”.

Under the terms, TikTok’s recommendation algorithm is set to be retrained on American user data to ensure feeds are free from outside manipulation.

“It’s unclear that it will even put TikTok’s algorithm in safer hands,” said Sen Wyden.

He opposed the 2024 law, and was among the US lawmakers who lobbied to extend the TikTok deadline in January in a bid to give Congress more time to mitigate threats from China.

Some users also expressed caution at the prospect of new investors.

Small business owner Tiffany Cianci, who has more than 300,000 followers and nearly four million likes on the platform, said she hopes the incoming investors will maintain the same user experience for entrepreneurs like her.

“I hope small business owners are protected,” Ms Cianci said.

TikTok has said that more than seven million small businesses market their products and services on TikTok in the US.

“I reserve judgement on whether or not we have saved the app for those small business,” she added.

Ms Cianci said she chose TikTok for promotion because the platform offers profit-sharing on terms that are more favourable than what competitors like Meta offer.

Over the last year, Ms Cianci has been active in organising protests in Washington and on TikTok aimed at saving the app.