TikTok has announced that it has signed a joint venture agreement with a group of investors that will allow the company to continue operating in the United States and avert the threat of a ban linked to its Chinese ownership.

According to an internal memo obtained by AFP, TikTok Chief Executive Officer, Shou Chew, informed employees that the social media company and its Chinese parent firm, ByteDance, had agreed to establish a new entity with Oracle, Silver Lake and Abu Dhabi-based MGX as major investors.

Oracle’s executive chairman and founder, Larry Ellison, is known to be a long-time ally of United States President Donald Trump.

In the memo, Chew stated that “The US joint venture will be responsible for US data protection, algorithm security, content moderation, and software assurance.”

He added that “It will also have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”

Chew told staff that 50 percent of the US venture would be owned by a consortium of new investors, including Oracle, Silver Lake and MGX, each holding a 15 percent stake.

He explained that affiliates of existing ByteDance investors would control slightly more than 30 percent of the venture, while ByteDance itself would retain just under 20 percent, the maximum ownership permitted for a Chinese company under the terms of the law.

According to the memo, TikTok Global’s US entities will be responsible for managing global product interoperability as well as certain commercial operations, including e-commerce, advertising and marketing.

Chew also noted that further work remains ahead of the January 22 closing date set for finalising the deal.

The new corporate arrangement follows legislation enacted under former President Joe Biden, which required ByteDance to divest TikTok’s US operations or face a ban in its largest market.

US policymakers, including Trump during his first presidency, had raised concerns that China could use TikTok to collect data on Americans or exert influence through the platform’s advanced algorithm.

Trump has since delayed enforcement of the law through a series of executive orders, most recently extending the deadline into January.

The agreement largely confirms a White House announcement made in September, which stated that a new venture had been agreed with China and would comply with the requirements of the 2024 law.

Commenting on the arrangement at the time, Trump said, “If I could make it 100 percent MAGA I would, but it’s not going to work out that way unfortunately.”

The internal memo represents the first indication that TikTok has formally signed onto the deal announced by the Trump administration, a move that would have required approval from the Chinese government.

Trump had specifically mentioned Oracle founder Larry Ellison in September as a key figure in the deal.

Ellison has since returned to prominence through his renewed ties with Trump, who has involved him in major artificial intelligence partnerships with OpenAI.

Ellison has also financed his son David’s recent takeover of Paramount and is participating in his son’s bidding contest with Netflix to acquire Warner Bros.

ByteDance did not immediately comment on the agreement, although industry experts described the deal as a compromise that helped the company avoid losing access to the lucrative US market.

“Keeping the US operation live is itself a victory” for ByteDance, said Li Chengdong, founder of Chinese technology consultancy Dolphin, in comments to AFP.

Li added that resolving the issue would allow ByteDance to concentrate on new ventures, including artificial intelligence projects, and could support efforts to pursue an initial public offering.

Zhang Yi, a researcher with technology research firm iiMedia, said the US market remains of “paramount importance to TikTok,” but cautioned that challenges could still arise.

“The US side could still leverage its regulatory power… to impose unfair demands on TikTok,” Zhang said.