TikTok deal clears path to keep operating in US

WEB DESK: TikTok has reached an agreement to form a joint venture with a group of investors, a move that would allow the short-video platform to continue operating in the United States and sidestep the risk of a nationwide ban linked to its Chinese ownership, according to US media reports.

In an internal message circulated to staff and cited by Bloomberg and Axios, TikTok chief executive Shou Chew said the deal had been approved by both the company and its parent firm, ByteDance. The proposed US-based entity will include Oracle, private equity firm Silver Lake and Abu Dhabi-backed investment group MGX as key investors.

Chew told employees that existing ByteDance investors will hold around one-third of the new venture, while ByteDance itself will retain just under 20pc, the maximum stake permitted for a Chinese company under US law.

The restructuring is aimed at complying with legislation enacted during the administration of former president Joe Biden, which requires ByteDance to divest TikTok’s US operations or face a ban in what is its largest market. Concerns raised by American lawmakers have centred on the possibility that Beijing could exploit TikTok to access user data or influence public opinion through its recommendation algorithm.

Donald Trump, who voiced similar concerns during his first term as president, has repeatedly postponed enforcement of the law through executive orders, most recently extending the deadline until January.

The agreement broadly aligns with a White House announcement made in September, which stated that Washington and Beijing had reached an understanding on a structure that would meet the requirements of the 2024 legislation.

According to Chew’s memo, once finalised, the US joint venture will function independently, with control over data security, algorithm safeguards, content moderation and software oversight within the United States. Meanwhile, TikTok’s US entities under TikTok Global will continue to handle certain international operations, including advertising, marketing and e-commerce activities.

It remains unclear whether these global units will continue to be owned by ByteDance.

The internal memo marks the first confirmation that TikTok has formally signed on to the arrangement announced by the Trump administration, a deal that would also require approval from the Chinese government to move forward.

Trump had earlier identified Oracle founder and executive chairman Larry Ellison — a longtime ally — as a central figure in the proposed structure. Ellison has recently re-emerged in the public spotlight through his involvement in major technology and media ventures, as well as his participation in high-profile artificial intelligence partnerships backed by the Trump administration.