Here’s what you should know about TikTok’s US deal

Tik Tokowned by Chinese company ByteDance, has been at the center of controversy in the United States for years now over concerns about the Chinese government’s potential access to user data.

As a result, American users often found themselves caught in the middle of this tension. Last year, the app experienced a temporary outage in the US, leaving millions of users in suspense before it was quickly restored. TikTok is back on the App Store and Google Play Store In February.

A number of investors competed to buy the application, and after Trump extended the deadline to ban TikTok for the fourth time, the battle finally ended. As of DecemberTikTok has officially signed a deal to divest part of its US entity to a group of US investors. Now the deal is scheduled to close this week, Semaphore I mentioned Thursday.

This comes nearly three months after President Donald Trump He signed an executive order Who agrees to sell TikTok’s US operations to a group of US investors.

A week ago, President Trump Announce Chinese President Xi Jinping has given his approval to the TikTok deal, which would allow a consortium of American investors to take control of the platform. ByteDance has publicly stated that it will ensure the platform remains available to US users.

Who owns TikTok in the US?

According to the memo seen by TechCrunch, the investor group consists of Oracle, private equity firm Silver Lake, and investment firm MGX. Collectively, they will own 45% of US operations, with ByteDance retaining a roughly 20% stake. Axios The news was first reported, citing sources valuing TikTok US at around $14 billion – a figure also cited by Vice President J.D. Vance.

In September, a report indicated that A “Frame” deal. TikTok is set up between the US and China, with a consortium of investors – including Oracle, Silver Lake and Andreessen Horowitz – overseeing TikTok’s US operations. These investors were expected to hold an 80% stake, and the remaining shares would be owned by Chinese stakeholders.

The newly formed TikTok USDS Joint Venture LLC will oversee the app’s operations, including data protection, algorithm security, content moderation, and software assurance.

Oracle will act as a trusted security partner, responsible for auditing and ensuring compliance with national security requirements, according to the memorandum. The company already provides cloud services for TikTok and manages user data in the US. Notably, Oracle previously made an offer to buy TikTok in 2020.

A White House official said earlier that Oracle will replicate and secure a new American version of the algorithm, and TikTok owners residing in the United States can rent the algorithm from ByteDance, which Oracle will then retrain.

ByteDance will not have access to information about TikTok users in the US or any influence on the US algorithm.

The deal was scheduled to close on January 22, 2026, so hopefully we’ll learn more soon.

What US users should know

Reports from Bloomberg It notes that upon completion of the deal, TikTok will be discontinued in the US and users will need to move to a new platform. However, the details of this platform remain largely unclear, including its features and how it will differ from the native app.

How did we get here?

To fully understand this high-stakes drama, we’ll first revisit the timeline of TikTok’s turbulent relationship with the US government, which led to various legal battles and negotiations.

The drama first started in August 2020when Trump signed an executive order banning transactions with parent company ByteDance.

A month later, the Trump administration sought to force the sale of TikTok’s US operations to a US-based company. Key contenders include Microsoft, Oracle and Walmart. However, an American judge temporarily Forbidden Trump’s executive order allows TikTok to continue operating while the legal battle unfolds.

Things began to progress more last year after the transition to the Biden administration. after Senate The bill against TikTok passed, President Joe Biden I signed it.

In response, TikTok has filed a lawsuit against the US governmentchallenges the constitutionality of the ban and argues that the app and its American users have had their First Amendment rights violated. The company has consistently denied that it poses a security threat, stressing that its data stored in the United States complies with all local laws.

Fast forward to 2024: Trump He has had a change of heart since his first term and is trying to achieve a 50-50 ownership arrangement between ByteDance and a US company.

There were many contenders, including People’s View for TikTok a consortium organized by the founder of Project Liberty Frank McCourt. This group is backed by investment firm Guggenheim Securities and law firm Kirkland & Ellis. Supporters include the co-founder of Reddit Alexis OhanianTelevision personality and investor Kevin O’LearyThe inventor of the World Wide Web, Tim Berners-Lee, and the great research scientist David Clark.

He leads another group called the Federation of American Investors Employer.com founder Jesse Tinsley It includes the co-founder of Roblox David BaszuckiAnchorage Digital co-founder, Nathan McCauley, and popular YouTuber MrBeast.

Others included in the run Amazon, AppLovin, Microsoft, Confusion Amnesty International, rumbleWalmart, Zoom, and former CEO of Activision Bobby KotickAnd former US Treasury Secretary Steven Mnuchin.

Story updated after publication.