The move caps a lengthy tussle over the hugely successful video-sharing app in the world's largest economy, where TikTok says it has more than 170 million users.
According to an internal memo seen by AFP, TikTok CEO Shou Chew told employees that the social media company and its Chinese owner ByteDance had agreed to the new entity.
Oracle, Silver Lake and Abu Dhabi-based MGX are on board as major investors, the memo said. Oracle's executive chairman Larry Ellison is a longtime ally of US President Donald Trump.
"The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance," Chew said in the memo.
"It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure."
Chew told staff that half the US venture will be held by a consortium of new investors including Oracle, Silver Lake and MGX -- which will have 15 percent each.
Affiliates of existing ByteDance investors will own a touch over 30 percent of the venture, with Bytedance retaining just shy of 20 percent, the maximum ownership allowed for a Chinese company under the terms of the law.
TikTok Global's US entities will manage global product interoperability, and certain commercial activities, including e-commerce, advertising, and marketing, according to the memo.
Chew noted that there is more work to be done ahead of the January 22 closing date for the deal.
- Ellison amassing media? -
The new set-up is in response to a law passed under Trump's predecessor, Joe Biden, that forced ByteDance to sell TikTok's US operations or face a ban in its biggest market.
US policymakers, including Trump in his first presidency, warned that China could use TikTok to mine data from Americans or exert influence through its state-of-the-art algorithm.
Trump has delayed enforcement through successive executive orders, most recently extending the deadline into January.
The deal largely confirms a September announcement by the White House that said a new venture had been agreed with China and would meet the requirements of the 2024 law.
"If I could make it 100 percent MAGA I would, but it's not going to work out that way unfortunately," Trump told reporters after the TikTok announcement in September.
Trump in September had specifically named Oracle boss Ellison, one of the world's richest men, as a major player in the arrangement.
Ellison has returned to the spotlight through his dealings with Trump, who has brought his old friend into major AI partnerships with OpenAI.
Ellison has also financed his son David's recent takeover of Paramount and is involved in his son's bidding war with Netflix to take over Warner Bros.
- Bytedance impact -
Beijing's foreign ministry spokesman Guo Jiakun did not directly address reports of the deal, reiterating Friday that "China's position on the TikTok issue is consistent and clear".
Bytedance did not immediately comment, but experts said it was a compromise that had averted the blow of losing access to the lucrative US market.
"Keeping the US operation live is itself a victory" for Bytedance, Li Chengdong, founder of Chinese technology consultancy Dolphin, told AFP.
Settling the issue allows Bytedance to focus on new ventures including artificial intelligence projects, and could help it move towards an initial public offering (IPO), Li said.
Zhang Yi of technology research firm iiMedia said the US market was of "paramount importance to TikTok" but warned the deal did not guarantee smooth sailing going forward.
"The US side could still leverage its regulatory power... to impose unfair demands on TikTok," Zhang said.
TikTok: key things to know
Washington, United States (AFP) Dec 19, 2025 -
TikTok boasts over a billion users worldwide, including more than 170 million in the United States, it says -- nearly half the country's population.
Here is a closer look at the app, which said Thursday it had signed a deal with investors that would allow it to maintain US operations and avoid a ban threat over its Chinese ownership.
- Born in China -
TikTok's surge from niche video-sharing tool to global powerhouse is one of the biggest shifts in digital entertainment since the advent of social media.
From friends dancing together to home chefs sharing recipes, TikTok can transform ordinary users into celebrities, revolutionizing the traditional path to stardom.
It was launched in 2016 by Chinese tech company ByteDance for the local market, where it is called Douyin. The international version, TikTok, was released in 2017.
The app gained massive momentum after merging with Musical.ly, a lip-synching app, a year later.
- 'For You' page -
The so-called secret sauce in TikTok's rapid expansion has been its innovative recommendation algorithm.
Instead of showing content from accounts that users already follow, the endless scroll of TikTok's "For You" page is based on viewing habits, engagement patterns and sophisticated content analysis.
A video from a complete unknown can reach millions of people if the algorithm determines it engaging enough -- a model that the app's rivals have been quick to follow.
TikTok's focus on short clips also helps keep users hooked.
It was initially limited to uploads of 15 seconds, but this was later expanded to up to 10 minutes, and now some users can post videos as long as 60 minutes.
- Political suspicions -
TikTok's mass appeal means its rise has been controversial -- mainly over its Chinese ownership and its built-in unpredictability.
The platform has faced scrutiny from governments worldwide, particularly in the United States, over data privacy and potential ties to the Chinese government, including accusations of spying and propaganda.
India banned TikTok along with other Chinese apps in 2020, citing national security concerns.
- Huge fine -
A European Union watchdog fined TikTok 530 million euros ($620 million) in May for failing to guarantee its user data was shielded from access by Chinese authorities.
The social media giant has appealed the fine, insisting it has never received any requests from Chinese authorities for European users' data.
- Teenage safety fears -
In a world first this month, Australia banned under-16s from major social media platforms including TikTok, Instagram and YouTube, with the onus on the tech firms to kick young users off their services.
Other countries have expressed concern about the potential effects of TikTok on young users, including accusations it funnels them into echo chambers and fails to contain illegal, violent or obscene content.
Albania banned TikTok for a year in March after a 14-year-old schoolboy was killed in the culmination of a confrontation that started on social media.
- Sell or be banned -
The US Congress passed legislation in 2024 requiring ByteDance to divest control of TikTok in the United States or be banned.
On Thursday, according to an internal memo seen by AFP, TikTok CEO Shou Chew told employees that the social media company and its Chinese owner ByteDance had agreed to a new joint venture in the United States.
Oracle -- whose executive chairman Larry Ellison is a longtime ally of President Donald Trump -- Silver Lake and Abu Dhabi-based MGX are on board as major investors.
"The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance," Chew said in the memo.
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