Tik Tok has signed a significant deal to sell its vast business units in the United States and this way, hand over operational leadership to American investors, thus, avoiding a ban countrywide. 

The arrangement was announced by Chief Executive Officer Shou Chew in a memo which informed 170 million users in the United States who interact with its nonstop video stream of highly popular videos.

Chew said in his memo, which was obtained by CNN.

“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community,”

This is a vital step, first documented by Axios, and will meet a regulatory deadline of January 22, 2026 as part of Trump-backed negotiation.  

Deal Breakdown  

The US Tik Tok joint venture replacements share ownership in the following way i.e., 15% each  to a consortium of Oracle, Silver Lake, and MGX consortium of the United Arab Emirates, 30% between affiliates of Bytedance, and 19.9% as an affiliate of Bytedance. 

Oracle will also comply with the US user data secure storage and retraining the algorithm on American data only. 

At the centre of many of these debates is TikTok’s recommendation system. The “For You” feed which uses machine learning to decide what content to show users, is widely credited with driving the app’s rapid growth and stickiness. 

But it has also sparked concern because it determines what people see, including political or news-related content.

The content moderating will be kept in the hands of the US, while e-commerce, advertising, and marketing features will continue to be under the worldwide control of ByteDance. 

The setup is an amalgamation of an American supervision and a Chinese technical facility.  

Rocky Road Along the Way  

Past laws that were passed in the previous year required that ByteDance should sell 80% of its assets in the United States or would be banned. 

The scale of the 170 million population on Tik Tok, enabled the platform to have a presence that was too big to die. 

President Trump twice suspended the implementation of the ban, which was ultimately followed in September by an executive order that allowed an international-based solution of China. 

According to SendShort, the Tik Tok has a 40% market share of the United States short-video market.

What’s Next? 

Some of the challenges projected are getting the Chinese regulators to agree and seek dual regulatory consent. 

In case the agreement is concluded before the end of January, the functioning process will become smoother, and in the opposite case, any delay can cause a serious flight of users to competitors, including Instagram Reels. 

An effective resolution would make Tik Tok even more dominant in the industry; a failure would completely change the landscape of social media.