TikTok officially forms US joint venture with Oracle, Silver Lake, and MGX to resolve national security standoff
Jan 23, 2026
Key Points
- TikTok establishes a $14 billion US joint venture majority-owned by American investors—Oracle, Silver Lake, and Abu Dhabi's MGX each take 15%—to resolve national security concerns under a 2024 law.
- Oracle gains control of US data management and algorithm training, the core security mechanism that drove the entire divestiture push.
- Investors pay the US government a multibillion-dollar fee for arranging the deal, while TikTok reports 200 million US users despite facing accelerating competitive pressure from Meta and Google.
Summary
TikTok has officially established a US joint venture to resolve a years-long national security standoff, allowing the Chinese-owned app to continue operating in America under new American-controlled ownership.
The deal, negotiated by the Trump administration to comply with a 2024 law, creates a new entity where Oracle, private equity firm Silver Lake, and Abu Dhabi-based MGX each own 15%, while existing TikTok investors retain roughly 30%. Other investors include JD Vance's former firm Revolution and Michael Dell's family investment office. The new entity is valued at approximately $14 billion.
Oracle will oversee US data management and algorithm training, a critical control mechanism given the national security concerns that drove the divestiture push. TikTok CEO Shou Chew, a Singaporean executive, stated in an internal note that the majority American-owned venture will operate under safeguards protecting data, algorithm security, content moderation, and software assurances for US users.
Investors are paying the US government a multibillion-dollar fee for arranging the deal. TikTok disclosed 200 million US users, up from 170 million in 2024.
The structural complexity of splitting TikTok into a US entity and international version remains partially unresolved. Content will need to flow between both versions to preserve user experience, since cutting off international creators would degrade the app. The exact mechanics of that content sharing are still being worked out.
The $14 billion valuation drew skepticism from observers who viewed it as low given TikTok's scale. TikTok has never been as profitable as YouTube or Instagram. Meta and Google moved quickly to copy TikTok's short-form vertical video format. Instagram's launch of Stories effectively stalled Snapchat's growth trajectory, suggesting that incumbents can neutralize smaller competitors through rapid feature parity. TikTok faces similar competitive pressure from American-made alternatives already in market.