TikTok has signed a long-anticipated agreement to spin off its US operations into a new entity controlled by a group of mostly American investors, a major step toward complying with US law and securing the platform’s long-term future in the United States.

The agreement was confirmed by TikTok CEO Shou Chew in a memo to employees on Thursday, marking tangible progress on a deal backed by President Donald Trump and negotiated over months of political and regulatory pressure.

While the transaction has not yet closed, the move brings TikTok closer to resolving a legal standoff that threatened to ban the app unless it separated from its Chinese parent company, ByteDance.

Ownership structure of the new TikTok US Entity

Under the agreement, the US version of TikTok will be operated by a newly formed joint venture. According to Chew’s memo, 50% of the entity will be owned by a consortium of American-led investors, including:

• Oracle, the US-based technology giant
• Silver Lake, a major private equity firm
• MGX, an Emirati-backed investment group

Just over 30% of the venture will be held by affiliates of existing ByteDance investors, while ByteDance itself will retain a 19.9% stake, keeping it below the threshold that would trigger a ban under US law.

Chew said TikTok and ByteDance have both agreed to the deal’s terms and are working toward closing the transaction by January 22, 2026, pending regulatory approvals.

A path around the Ban-or-Sale Law

The deal follows legislation passed last year requiring TikTok to divest roughly 80% of its US assets to non-Chinese investors or face a nationwide ban. Although the law technically went into effect in January, enforcement was repeatedly delayed by Trump as negotiations continued.

In September, the Trump administration announced it had reached an understanding with China to transfer control of TikTok’s US operations. Trump later signed an executive order classifying the agreement as a “qualified divestiture” and granting a 120-day enforcement delay to allow the deal to close.

“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities,” Chew wrote in the memo obtained by CNN.

Data, Algorithms, and Control

Under the proposed structure, the US entity will retrain TikTok’s algorithm using US user data, a key demand from US lawmakers concerned about national security and data access.

Oracle will oversee the storage of American user data, while the US joint venture will assume responsibility for content moderation for US users.

However, Chew’s memo indicates that the global TikTok organization, still controlled by ByteDance, will continue managing e-commerce, advertising, and marketing operations linked to the US platform. That arrangement could remain a point of scrutiny as regulators evaluate the final structure.

Regulatory hurdles remain

Despite progress, the deal still faces major approvals. It must be cleared by US regulators and also requires sign-off from the Chinese government.

Trump has said Chinese President Xi Jinping supports the deal, but Beijing has not publicly confirmed that position. Asked about the agreement, Chinese foreign ministry spokesperson Guo Jiakun said officials would defer to “competent Chinese authorities,” reiterating that China’s stance on TikTok remains unchanged.

What comes next

If completed, the deal would represent one of the most significant forced restructurings of a global tech platform in recent history, setting a precedent for how governments may handle foreign-owned digital services operating at massive scale.

For TikTok, the agreement offers a path to stability in its most important market. For Washington, it tests whether ownership restructuring can address security concerns without banning one of the world’s most popular apps outright.

Much now depends on regulatory approvals, and whether both Washington and Beijing ultimately sign off on the balance of control outlined in the deal.