TikTok has taken a significant step towards shifting control of its U.S. operations by signing agreements to sell a majority stake of its American assets to a consortium of investors led by American firms. While the sale is not yet finalized, this development brings the popular but controversial app one step closer to complying with U.S. government mandates aimed at limiting Chinese influence over the platform.
This move follows legislation signed into law by President Joe Biden and upheld by the Supreme Court, which requires ByteDance, TikTok’s Chinese parent company, to divest at least 80% of the app’s U.S. assets or face a ban in the country.
Transaction Details and Ownership Structure
In a memo shared internally, TikTok CEO Shou Chew informed employees about the agreement with American investors, outlining the creation of a new U.S.-based joint venture named TikTok USDS Joint Venture LLC. This entity is designed to allow more than 170 million Americans to continue enjoying TikTok while addressing data security concerns.
The consortium acquiring ownership includes three main partners that will collectively hold 50% of the new entity:
- Oracle, an American technology company responsible for storing TikTok’s U.S. user data, led by billionaire Larry Ellison.
- Silver Lake, a U.S.-based private equity firm with ties across the technology and media sectors.
- MGX, an Abu Dhabi-based investment firm, providing financial backing to the venture.
Additional stakeholders include affiliates of existing U.S. investors with a 30.1% share, as well as ByteDance holding a minority 19.9% stake, kept intentionally below 20% to avoid the new company being classified as foreign-controlled.
Regulatory Background and Timeline
The TikTok sale deadline has been extended multiple times over recent years, including during the Trump administration, when an executive order momentarily delayed enforcement following a previous deal attempt. This latest agreement aims for a closing date of January 22, 2026. Both ByteDance and TikTok have agreed on the terms to facilitate this transition.
TikTok’s Market Presence and User Demographics
TikTok's popularity remains undeniable, with 1.59 billion monthly active users worldwide by early 2025, ranking it as the fifth largest social media platform globally. The United States leads TikTok's user base with nearly 136 million users, followed by Indonesia with over 107 million users.
Financially, TikTok is a powerhouse, generating $23 billion in global revenue last year, with advertising comprising 77% of its income stream.
The app is especially popular among younger demographics: 71% of users fall within the 18-34 age range, while only 3.6% are older than 45. The gender split leans slightly male, with 55.7% of users identifying as men.
User Engagement Compared to Other Platforms
Americans spend an average of 52 minutes daily on TikTok, which surpasses the time spent on competing platforms such as YouTube (48 minutes), Instagram (35 minutes), and Facebook (30 minutes).
Concerns Over Data and Algorithm Management
The initial push for this divestiture stemmed from bipartisan concerns about ByteDance potentially accessing sensitive data from American TikTok users, particularly minors, and fears of foreign propaganda influencing the app’s content. Under the new deal, ByteDance retains the source code of TikTok’s recommendation algorithm but will license it to the U.S. joint venture, maintaining operational continuity while addressing regulatory scrutiny.
