TikTok CEO Shou Chew on Thursday told employees of the social media app that its owner, China’s ByteDance, has signed binding agreements to create a new joint venture for the app in the United States, as previously agreed in a deal with the Trump administration.
That deal means that the U.S. version of TikTok will become majority-owned by American investors, according to a memo obtained by NBC News.
The investors include American tech giant Oracle, California-based private equity fund Silver Lake and UAE investment firm MGX.
Those investors did not immediately respond to requests for comment. Spokespeople for the White House and the Treasury Department likewise did not reply to requests for comment on the deal.
One employee who received the memo said the internal reaction to the news was generally positive among TikTok’s American staff, but said most of their colleagues in Asia and Europe had not yet seen the memo, or not yet weighed in on it if they had.
As part of the deal, TikTok U.S. will also be overseen by a “new seven-member majority-American board of directors,” Chew said.
“The U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance,” Chew writes in his memo. “It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”
In September, Treasury Secretary Scott Bessent and China’s Vice Premier He Lifeng reached a “framework” deal to clear the way for American investors to take control of the U.S. version of the app.
TikTok’s legal saga in the United States stems from concerns shared by members of Congress across parties and by the intelligence community that ByteDance’s complicated relationship with the Chinese government poses a national security threat to the United States.
Millions of Americans post videos on TikTok every day, effectively giving the app and its owners access to much more information about people’s daily lives than many users realize.
These concerns about the data TikTok collects and how it could be used were the chief drivers behind the decision by U.S. lawmakers to take action to curb TikTok in 2024.
Under a bipartisan law passed by Congress, ByteDance was required to divest majority ownership of the U.S. version of the app, or face a ban initially set to go into effect in January of this year.
In January, as Trump was preparing to take office, the Supreme Court upheld the law. The high court rejected TikTok’s argument that an outright ban would violate free speech protections.
On Jan. 18, TikTok went offline for U.S. users for about 24 hours, causing an uproar among its millions of loyal fans and influential content creators.
Then President-elect Trump announced that he would delay the ban through an executive order as soon as he was sworn in.
That assurance was enough to convince TikTok to begin restoring service just a day before Trump’s inauguration.
The Trump administration repeatedly delayed the implementation of that law, however, until it cound hammer out the contours of an agreement with China. Trump ordered that “the Attorney General shall not take any action on behalf of the United States to enforce the Act for 120 days.”
That latest timeline ends on January 23. In the memo Thursday, TikTok’s CEO says the agreement will close one day before the deadline.
Oracle, one of the largest investors in the joint venture, is controlled by tech billionaire Larry Ellison. His son, David, recently acquired Paramount Global with approval from the Trump administration. David Ellison is now seeking to buy Warner Bros. Discovery via a hostile bid, for more than $108 billion.
Oracle has been a darling of the AI boom, ballooning Larry Ellison’s fortune to more than $230 billion, according to Bloomberg Billionaires.
The formally signed agreement is the latest sign of a slow thaw underway in the U.S.-China bilateral relationship.
Initially, little progress was made despite multiple meetings between Bessent and his Chinese counterparts.
But after Trump and China’s President Xi Jinping met in person in October, Beijing has resumed buying American soybeans and eased export controls on critical minerals.
Now, it appears, the TikTok deal will finally get over the finish line, as well.
