TikTok Signs Deal With US Investors to Form Data Security Joint Venture
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TikTok has signed agreements with a group of U.S.-based investors to establish a new American joint venture that would oversee data protection and content governance for TikTok’s U.S. operations.
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The arrangement follows years of negotiations between TikTok and U.S. officials over national security concerns tied to the app’s Chinese ownership. The Associated Press, citing an internal TikTok memo, reported that TikTok CEO Shou Zi Chew told employees that TikTok had signed an agreement with U.S. investors.
The Epoch Times cannot independently verify the contents of the internal memo.
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The deal reflects a long-discussed framework aimed at allowing TikTok to continue operating in the United States while addressing concerns over user data security and algorithm control. According to the memo cited by The Associated Press, the joint venture will be responsible for safeguarding U.S. user data, ensuring algorithm security, overseeing content moderation, and maintaining software integrity. The deal is expected to close on Jan. 22, 2026.
Separation of Security, Commercial Operations
Under the proposed structure, other TikTok entities in the United States that are wholly owned by ByteDance will continue to manage commercial operations, including e-commerce, advertising, marketing, and overall business operations, as well as maintaining TikTok’s global platform connectivity..
Chinese media reported that this division of responsibilities is consistent with earlier versions of a U.S. restructuring plan. ByteDance, TikTok’s parent company in China, will retain ownership of TikTok’s algorithm intellectual property and will license the algorithm to the new U.S. joint venture in exchange for licensing fees, according to those reports.
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While commercial activities such as advertising and e-commerce remain TikTok’s main revenue sources, Chinese media described the joint venture’s data protection and content security functions as non-profit in nature and costly to operate.
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To ensure the joint venture’s sustainability, the parties involved are expected to establish commercially reasonable revenue-sharing arrangements, according to Chinese media. These arrangements are intended to cover operating costs while preserving the separation between profit-generating business activities and security-related functions.
Ownership Structure and Political Context
ByteDance and TikTok have signed agreements with three investors—Oracle, private equity firm Silver Lake, and Abu Dhabi–based investment firm MGX—according to Chinese media and the memo cited by The Associated Press..
The new investors will collectively hold 45 percent of the joint venture. Existing ByteDance investors and affiliated parties will hold 30.1 percent, while ByteDance itself will retain a 19.9 percent stake, making it the largest single shareholder.
Oracle declined to comment when reached by The Epoch Times.
Despite ByteDance’s continued involvement, the joint venture will be majority-owned by U.S. investors and governed by a newly formed seven-member board of directors, according to the memo cited by The Associated Press.
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The deal reflects a shift in Washington’s political posture toward TikTok. In January, the app briefly went offline in the United States before President Donald Trump granted it a temporary reprieve, which was extended multiple times to allow negotiations to continue.
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On Sept. 25, Trump signed an executive order aimed at saving TikTok, given its popularity among young Americans, while ensuring ByteDance’s divestiture to protect U.S. national security. The executive order laid out the framework for a joint venture in which U.S. user data is stored in a cloud environment operated by an American company.
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TikTok and ByteDance have repeatedly denied that the Chinese Communist Party has access to U.S. user data, but lawmakers from both U.S. parties have expressed skepticism. The proposed joint venture appears aimed at meeting statutory requirements that TikTok remove China’s control over sensitive data and platform governance.
Neither ByteDance nor TikTok has publicly confirmed all aspects of the agreement, and the timeline and final structure could still change as negotiations continue.
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