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TikTok Finalizes US Spin-Off Deal to Avoid Ban, Secures Future

TikTok has finalized an agreement to spin off its U.S. operations into a new joint venture, concluding a long-running national security dispute. The deal gives significant equity stakes to Oracle, UAE's MGX, and Silver Lake, while Chinese parent ByteDance retains a minority share. This restructuring complies with a 2024 U.S. law mandating divestment and aims to protect user data through new security protocols. The arrangement also extends to other ByteDance apps like CapCut, securing their continued operation in the American market.

Key Points: TikTok US Spin-Off Deal Finalized with Oracle, Investors

  • Deal creates US joint venture to comply with law
  • Oracle, MGX, Silver Lake hold 15% stakes each
  • ByteDance retains 19.9% ownership
  • Deal also covers other ByteDance apps like CapCut
2 min read

TikTok finalises US spin-off deal to maintain operations

TikTok finalizes a US joint venture deal with Oracle & investors, complying with US law to avoid a ban and protect 200M users' data.

"will operate under defined safeguards that protect national security - TikTok Press Release"

New Delhi, January 23

TikTok finalised a deal to spin off its United States operations into a new joint venture, ensuring the video application remains accessible to its 200 million American users. The move concludes a multi-year legal and political dispute regarding national security and data privacy. According to a press release, the new entity includes significant equity stakes from a consortium of global investors and the original parent company.

The agreement specifies that tech giant Oracle, UAE-based MGX, and investment firm Silver Lake each hold a 15 per cent stake in the new venture. ByteDance, the Chinese parent company, retains a 19.9 per cent share.

This restructuring follows a 2024 law passed by Congress with bipartisan support that mandated TikTok divest from ByteDance or face a total ban in the United States. While the Supreme Court upheld the law, the current administration provided a window for the deal to materialise after a brief 14-hour service interruption in early 2025.

The company stated in its press release that the new joint venture "will operate under defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users."

Beyond the flagship video platform, the scope of this deal extends to other assets within the ByteDance ecosystem. The TikTok press release says the joint venture "will also cover other apps in the ByteDance portfolio, including CapCut and Lemon8." This inclusion ensures that the secondary applications used for video editing and social sharing also comply with the newly established security protocols and ownership structure required by United States regulators.

Earlier in December, TikTok signed the deal backed by US President Donald Trump to sell its US assets to a group of American investors, CEO Shou Chew told employees in a memo, as per CNN. Although the transaction was not then complete, the move brought TikTok one step closer to securing its long-term future in the United States.

Trump signed an executive order on September 26, clearing the way for the completion of a deal to sell TikTok's US assets to a consortium of mostly American investors.

- ANI

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Reader Comments

P
Priya S
This is such a complex corporate dance. Oracle getting a stake is interesting. But honestly, as a user, I just hope the app experience doesn't change. My cousin in the US was panicking when it went down for those 14 hours! 😅
R
Rohit P
The US protects its digital space fiercely. We in India should take note and be even more vigilant. Our IT rules are a step, but data sovereignty is the battle of this century. ByteDance still holding nearly 20% is something to watch.
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Sarah B
While I understand the security rationale, this sets a tricky precedent for global tech. It feels less like a free market and more like forced divestment under political pressure. A respectful criticism: could this discourage foreign investment in the US tech sector in the long run?
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Vikram M
Including CapCut and Lemon8 in the deal is smart. It closes loopholes. The "algorithm security" part is key - that's where the real influence lies. Hope the new oversight is robust and not just on paper.
K
Kavya N
So much drama over an app for short videos! But it shows how powerful these platforms are. In India, we've seen how social media can be misused. Strong regulation is necessary, but it must be balanced and not knee-jerk. Good that a deal is done.

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