TikTok’s Sale in the U.S. Approaches Finalization Due to National Security Issues

TikTok announced a significant deal to create a U.S.-based joint venture aimed at ensuring its continued operations in the country amid rising national security concerns. The agreement involves notable American investors Oracle, Silver Lake, and Abu Dhabi’s MGX who will collectively own 50% of the new venture.

TikTok’s Chinese parent company, ByteDance, will retain a 19.9% stake, while affiliates of existing investors will hold the remaining 30.1%. The deal is expected to finalize by January 22, 2026.

This move follows years of political pressure and legal challenges surrounding TikTok’s ownership due to fears over user data privacy and potential influence from the Chinese government. In 2020, then-President Donald Trump issued an executive order for ByteDance to divest its stakes in TikTok, citing these concerns.

The situation escalated when the U.S. government enacted the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA) in April 2024, mandating that foreign-controlled apps like TikTok must either sell their U.S. operations or face a ban.

The new joint venture aims to alleviate these concerns by implementing data storage measures that ensure U.S. user data is managed locally by Oracle and by retraining TikTok’s core algorithm with American data to mitigate foreign influence.

A board comprised mainly of American members will oversee the venture to ensure adherence to U.S. regulations and to build trust with American users.

However, skepticism remains. Critics, including Senator Ron Wyden, question whether the deal sufficiently safeguards American users’ privacy, sparking ongoing debates about data privacy and national security in today’s digital landscape. The completion of this deal marks a pivotal moment in TikTok’s trajectory in the U.S. market.