TikTok gets new owner in the US, but why it may not change much for its Chinese parent company
TikTok has finalized a deal to spin off parts of its US business into a joint venture, but the new investors won't be calling the shots on the app's most profitable operations. Oracle , private equity firm Silver Lake , and Abu Dhabi-based MGX will collectively own 50% of the new entity, while ByteDance retains just under 20%, according to an internal memo from CEO Shou Zi Chew viewed by Business Insider.
The deal, expected to close January 22, 2026, comes after months of regulatory pressure from a divest-or-ban law. TikTok briefly went dark in January before President Donald Trump granted extensions for the company to finalize the arrangement. ByteDance keeps control of TikTok's money-making operationsDespite the ownership shake-up, ByteDance will continue managing TikTok's core revenue streams including e-commerce and advertising. The memo reveals that the new joint venture will focus primarily on national security concerns rather than business strategy.
"The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance," the memo states. Meanwhile, TikTok Global's US entities, still under ByteDance control , will handle "global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing."
The new investors will oversee retraining the content recommendation algorithm on US user data to prevent outside manipulation, with Oracle serving as the trusted security partner. All sensitive US user data will be stored in Oracle's cloud infrastructure. Business as usual for TikTok's 170 million US usersFor TikTok's massive American user base, the change should be largely invisible. Chew assured employees that users would "continue to discover, create, and connect on the platform, enjoying the same experience as today." Advertisers will also "continue to connect with global audiences with no impact," according to the memo reported by Business Insider.
The arrangement's focus on security over business operations may explain why the White House valued the deal at just $14 billion in September—far below the $50 billion estimate from Morningstar analysts earlier in 2025. With ByteDance maintaining oversight of profitable operations while new investors handle compliance and security, TikTok appears to have crafted a deal that satisfies regulatory requirements without fundamentally disrupting its business model.
The deal, expected to close January 22, 2026, comes after months of regulatory pressure from a divest-or-ban law. TikTok briefly went dark in January before President Donald Trump granted extensions for the company to finalize the arrangement. ByteDance keeps control of TikTok's money-making operationsDespite the ownership shake-up, ByteDance will continue managing TikTok's core revenue streams including e-commerce and advertising. The memo reveals that the new joint venture will focus primarily on national security concerns rather than business strategy.
"The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance," the memo states. Meanwhile, TikTok Global's US entities, still under ByteDance control , will handle "global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing."
The new investors will oversee retraining the content recommendation algorithm on US user data to prevent outside manipulation, with Oracle serving as the trusted security partner. All sensitive US user data will be stored in Oracle's cloud infrastructure. Business as usual for TikTok's 170 million US usersFor TikTok's massive American user base, the change should be largely invisible. Chew assured employees that users would "continue to discover, create, and connect on the platform, enjoying the same experience as today." Advertisers will also "continue to connect with global audiences with no impact," according to the memo reported by Business Insider.
The arrangement's focus on security over business operations may explain why the White House valued the deal at just $14 billion in September—far below the $50 billion estimate from Morningstar analysts earlier in 2025. With ByteDance maintaining oversight of profitable operations while new investors handle compliance and security, TikTok appears to have crafted a deal that satisfies regulatory requirements without fundamentally disrupting its business model.
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