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TikTok, the wildly popular short-video platform owned by China ByteDance, has taken a major step toward reshaping its future in the United States. According to a Bloomberg report, TikTok has signed binding agreements to create a new U.S.-based joint venture that will be majority-owned by American investors, marking the most concrete step yet in its long-running effort to separate from Chinese parent company ByteDance amid mounting national security scrutiny.

The agreement, confirmed in an internal memo from TikTok CEO Shou Chew, is expected to close on January 22, 2026, pending final regulatory approvals. The deal places Oracle at the center of TikTok’s U.S. operations and could significantly alter the platform’s governance, data security framework, and political standing in Washington.

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Oracle Leads the New TikTok U.S. Investor Group

Under the proposed structure, Oracle will lead a buyer group that includes private equity firm Silver Lake and Abu Dhabi-based investor MGX, each taking a 15% stake in the newly formed TikTok U.S. entity. More than 50% of the investors will be new, according to the memo, signaling a substantial reshuffling of ownership.

Affiliates of existing China ByteDance investors will hold a 30.1% stake, while ByteDance itself will retain a 19.9% stake. Although this reduces ByteDance’s direct influence, it stops short of a full divestment—an issue that has long concerned U.S. lawmakers.

Oracle’s role was welcomed by investors. Shares of Oracle (ORCL) jumped more than 5% in after-hours trading following the news and continued to rise in pre-market trading, reflecting optimism around the company’s expanding footprint in cloud infrastructure and U.S. data security.

More on Oracle’s cloud business can be found on its official site: https://www.oracle.com/cloud/

Related video: TikTok reaches deal to avert US ban with 80% asset sale 

U.S. Control and Governance Create TikTok Structure

Once finalized, TikTok U.S. will operate as an independent company with authority over U.S. user data, content moderation, and platform security. Oversight will come from a seven-member board, with a majority of American directors, aligning the structure with U.S. national security requirements.

In his memo to employees, CEO Shou Chew emphasized that the new arrangement gives the U.S. entity “clear and independent authority over sensitive operational decisions,” a point US regulators have repeatedly demanded.

Algorithm Concerns Looming with China Bytedance 

Despite the progress, concerns remain—particularly around TikTok’s powerful recommendation algorithm. Under the framework outlined by the White House, China ByteDance will license its AI technology to TikTok U.S., which will then retrain a new system using American user data stored on Oracle’s cloud servers.