This agreement represents a crucial advancement in addressing the prolonged uncertainty regarding the short video app’s standing in the United States, particularly since August 2020, when former President Donald Trump initially sought to ban the app, which is now regularly used by over 170 million Americans.
The specifics of the agreement align with those disclosed in September, when Trump postponed the enforcement of a law that would prohibit the app unless its Chinese ownership was divested, as part of efforts to separate TikTok’s US operations from the global platform. He also stated that the agreement satisfied the divestiture criteria.
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On Thursday, the company informed its employees that ByteDance and TikTok have established binding agreements with three leading investors—Oracle, Silver Lake, and MGX—to create a new TikTok US joint venture called TikTok USDS Joint Venture LLC.
Oracle opted not to comment. The White House directed inquiries to TikTok. According to a memo, TikTok indicated that this deal will allow “over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.”
Set to conclude on January 22, the agreement would resolve years of attempts to compel ByteDance to divest its US operations due to national security worries.
According to the memo—confirming reports from Reuters and other sources in September—Oracle, Silver Lake, and Abu Dhabi-based MGX will together possess 45% of the new entity.
The US joint venture will be divided such that a consortium of new investors will control 50%—with Oracle, Silver Lake, and MGX each having 15%; affiliates of certain existing ByteDance investors will hold 30.1%; and ByteDance will retain 19.9%, the memo stated.
ByteDance did not provide an immediate response to a request for comment.
