TikTok has signed an agreement to house its U.S. operations in a new joint venture majority-owned by American investors, according to internal memos obtained by Axios and CNBC.

The entity, named TikTok USDS Joint Venture LLC, will close on January 22, CEO Shou Zi Chew told employees. The deal concludes a years-long effort to address national security concerns surrounding the platform’s Chinese parent company ByteDance.

Ownership Structure

Oracle, Silver Lake, and Abu Dhabi-based MGX will collectively control 45% of the U.S. entity, with each holding a 15% stake, according to the memo. Nearly one-third of the company will be held by affiliates of existing ByteDance investors, while ByteDance will retain nearly 20%.

The joint venture will be “majority owned by American investors, governed by a new seven-member majority-American board of directors, and subject to terms that protect Americans’ data and U.S. national security,” Chew wrote in the memo.

The deal values TikTok’s U.S. business at $14 billion, a source confirmed to Axios. Oracle shares rose 5% in after-hours trading following the announcement.

Operational Responsibilities

The U.S. joint venture will oversee data protection, algorithm security, content moderation, and software assurance, per the memo. Oracle will serve as the “partner” responsible for compliance with agreed-upon terms.

“A trusted security partner will be responsible for auditing and validating compliance with the agreed-upon National Security Terms, and Oracle will be the trusted security partner upon completion of the transaction,” the memo states.

The entity will be tasked with “retraining the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation,” according to the memo. U.S. user data will be stored in Oracle’s U.S.-based cloud computing data centers.

TikTok’s global U.S. entities will continue managing “global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing,” Chew wrote.

Regulatory Background

The deal follows a national security law upheld by the Supreme Court in January that required ByteDance to divest TikTok’s U.S. operations or face a ban. U.S. President Donald Trump issued an executive order in September delaying enforcement of the law and any potential shutdown of TikTok for 120 days, giving negotiators additional time to finalize a proposed deal.

Trump first demanded ByteDance sell its U.S. operations through an executive order in 2020. Congress passed legislation in 2024 mandating either a sale or a ban.

ByteDance said in September it would “work in accordance with applicable laws to ensure TikTok remains available to American users through TikTok U.S.”