TikTok says it has signed binding agreements with Oracle, Silver Lake and Abu Dhabi-based MGX to create a new U.S. joint venture that is expected to close Jan. 22, 2026, a structure designed to keep the app operating in the U.S. while meeting the federal “divest-or-ban” law.
In an internal memo from CEO Shou Zi Chew published in full by The Verge, the company said the new entity, TikTok USDS Joint Venture LLC, will be 50% owned by the new investor consortium (15% each for Oracle, Silver Lake and MGX), 30.1% held by affiliates of certain existing ByteDance investors, and 19.9% retained by ByteDance.
The White House previously outlined the same ownership ceiling and governance model when President Donald Trump signed an executive order deeming a proposed framework a “qualified divestiture.”
In a fact sheet, the White House said ByteDance would hold less than 20%, select one of seven directors, and be excluded from the entity’s security committee, while Oracle would act as the security provider. The fact sheet also says the order directed the attorney general not to enforce the law for 120 days to allow completion of the divestiture.
Both the executive order and the Supreme Court’s January 2025 decision upholding the law emphasize that compliance is not only about ownership percentages. The order summarizes the statute’s requirement that a qualified divestiture must preclude an “operational relationship,” including cooperation on the content recommendation algorithm and agreements on data sharing.
The Supreme Court opinion discusses that same statutory design, including Congress’s focus on preventing continued cooperation around the recommendation system and sensitive data access.
In the employee memo, TikTok said the U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation, and software assurance, including “retraining the content recommendation algorithm on U.S. user data,” with U.S. user data stored in Oracle-run cloud infrastructure in the United States. The White House fact sheet also describes algorithm retraining and monitoring by “trusted security partners.”
Members of Congress have focused on whether post-deal arrangements, especially around algorithm access, meet the law’s severance requirements. House Select Committee on China Chair John Moolenaar said in a statement that majority American ownership would be an important step, but argued the law also sets “guardrails,” that he said should limit ByteDance’s role in the recommendation algorithm.
A separate constraint sits outside U.S. law: China’s export controls. A Congressional Research Service explainer notes China imposed export controls in 2020 on algorithms used in social media platforms, while legal analysis of China’s technology export catalogue highlights restrictions on “personalized information recommendation” technologies.
Oracle already provides cloud infrastructure and security services to TikTok, and the deal would add further responsibilities under U.S. security requirements. Oracle has reported rapid cloud growth tied to AI-era demand; in its fiscal 2026 first-quarter results, Oracle said cloud revenue rose to $7.2 billion (up 28% year over year) and cloud infrastructure revenue rose 55%.