TikTok has entered into an agreement with Oracle and a group of U.S.-based investors to reorganise its American business, significantly lowering the threat of a nationwide shutdown.
The transaction, which is expected to be finalised on January 22, brings TikTok closer to meeting U.S. regulatory demands ahead of a looming January enforcement deadline.
Deal Follows U.S. Law Requiring Divestment
The restructuring effort comes almost a year after U.S. legislation mandated the sale or closure of TikTok’s U.S. operations over national security concerns linked to its Chinese ownership.
According to a report by Axios, citing an internal memo from TikTok Chief Executive Officer Shou Zi Chew, the agreement includes the formation of a new joint venture that will oversee TikTok’s U.S. business.
Ownership Breakdown Under the New Structure
Under the proposed arrangement, Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment company MGX will jointly own a 45% stake in the newly created U.S. entity.
ByteDance, TikTok’s parent company, will maintain a minority stake, though the exact size of its holding has not been disclosed.
The agreement follows months of negotiations as TikTok worked to satisfy U.S. legal requirements that at least 80% of its American assets be transferred to entities approved by U.S. regulators.
Political and Regulatory Stakes Remain High
The divestment law was signed by former U.S. President Joe Biden and reflected bipartisan concerns that TikTok’s ties to China could expose U.S. user data or enable foreign influence.
TikTok and ByteDance have consistently rejected those claims.
Pressure intensified as a potential ban deadline of January 23 approached, following an enforcement extension granted in September by President Donald Trump to allow additional time for negotiations.
Without a completed deal, TikTok risked removal from U.S. app stores and severe operational restrictions.
CEO Calls Deal a Key Milestone
In his internal message to staff, Chew described the agreement as an important breakthrough while cautioning that additional steps are still required before the transaction is fully completed.
He added that both TikTok and ByteDance have approved the proposed terms, signalling internal consensus after prolonged uncertainty over the platform’s future in its largest advertising market.
Why Oracle’s Role Is Critical
Oracle’s participation is seen as central to the agreement, given its existing role as TikTok’s U.S. cloud infrastructure provider and its involvement in earlier data security proposals.
Analysts say Oracle’s deeper oversight could help reassure regulators that U.S. user data will be stored and managed under American control.
