TikTok signs agreement for new joint venture keeping it online in the U.S.

TikTok has closed a deal with Oracle and two other investors that will allow the popular social video platform to continue operating in the US

50 percent of the deal, which is expected to be concluded on January 22, will belong to a new investor consortium, including technology giant Oracle, Silver Lake and MGX, a technology fund in the United Arab Emirates, each with a 15 percent stake. TikTok parent company ByteDance will own 19.9% ​​of the U.S.-based joint venture, while affiliates of existing ByteDance investors will own 30.1%, TikTok said in a memo to employees.

“With these agreements in place, our focus must remain as it has always been, firmly delivering for our users, creators, businesses, and the global TikTok community,” TikTok Chief Executive Officer Shou Zi Chew wrote in his note.

The deal removes a shadow cast over the future of TikTok, which has become one of the world’s most dominant social media platforms and has a large presence in Culver City.

The company’s future in the United States has been uncertain for many years due to lawmakers’ security concerns about parent company ByteDance’s ties to China. ByteDance was under pressure to divest ownership of the app’s US operations or face a nationwide ban after Congress passed a law that took effect in January. President Trump, who led the push to ban TikTok in the US years ago, defended the closure by signing orders allowing TikTok to continue operating in the country, and signed an executive order outlining the new joint venture in September.

The initiative, which will oversee U.S. data protection, algorithm security, content moderation and software assurance, will be led by a seven-member board, the majority of which are Americans, Chew said in his memo. Chew wrote that Oracle will be the security partner responsible for “auditing and verifying compliance with agreed-upon National Security Requirements.”

Oracle Chief Executive Officer Larry Ellison and his family also own Warner Bros. He is leading efforts to acquire Discovery.

Oracle did not return a request for comment. Silver Lake declined to comment. The White House referred questions about the deal to TikTok on Thursday. In September, Trump said Chinese President Xi Jinping had approved the agreement.

“These security measures will protect the American people from the misuse of their data and the influence of a foreign adversary, while also allowing the millions of American viewers, creators, and businesses who rely on the TikTok app to continue using it,” Trump said in his executive order.

The announcement will also come as a relief to some creators and businesses who rely on TikTok to entertain and reach their fans and customers.

“I hope he stays true to the platform and the independence we get from it,” said Yasmine Sahide, who posts comedy videos on TikTok and has 2.4 million followers. “I hope we can continue to monetize our videos in the same way, because if it wasn’t for that I think a lot of people would leave or be uninspired.”

TikTok creator Keith Lee, who posts food-related videos, said he expects the algorithm to change. “I hope we can still stay connected to our community and reach an audience the way we used to,” said Lee, who has 17.3 million followers.

Many TikTok creators live in Southern California, close to TikTok’s office in Culver City. During the years when the future of TikTok seemed uncertain, some of these creators diversified by publishing their content on other platforms such as YouTube and Instagram.

“This is a smart way to avoid ownership and data issues,” Ray Wang, principal analyst at Constellation Research, said of the deal.

If completed, the deal would eliminate a persistent problem in Beijing-Washington relations and signal progress in broader negotiations. But it would also deprive China’s most valuable private company of full control over an American social media influencer.

ByteDance’s coveted algorithms are considered central to TikTok’s business. According to Bloomberg, under the deal proposed by Washington, ByteDance will license its AI recommendation technology to the newly created US entity TikTok, which will use the algorithm to retrain a new system secured by Oracle. According to TikTok, the algorithm will be retrained on US user data by the US joint venture.

Some industry observers questioned whether the deal addressed larger concerns surrounding TikTok in the legislation Congress passed.

“While these executive orders have affirmatively allowed the platform to operate and maintain space for speech, they do not resolve fundamental concerns about the law that could be applied to other platforms in the future and raise questions of executive authority,” said the Cato Institute senior fellow for technology policy. Jennifer Huddleston said in a statement.

“The fact that TikTok remains available under such orders does not mean that policy concerns regarding the underlying law have been resolved.”

Bloomberg contributed to this report.