US, China agree to spin off TikTok's US operation, White House official confirms
TikTok worked with the US and China to spin off its American business to comply with the law
O’Leary Ventures Chairman Kevin O’Leary explains what President Donald Trump’s TikTok deal means for the economy and gives his take on the looming government shutdown on ‘The Bottom Line.’
The U.S. and China on Thursday signed off on a TikTok U.S. spin-off deal that will allow the short-form video app to continue to operate in the U.S. by addressing concerns about its Chinese parent company, ByteDance, a White House official confirmed to FOX Business.
The new TikTok U.S. joint venture, featuring a mostly American investor group led by Oracle and Silver Lake, was revealed last month when TikTok CEO Shou Chew told employees in an internal memo that the company had signed agreements to create the new entity.
He said in the memo that the new entity would address U.S. lawmakers' concerns about the Chinese government's ability to use its influence over ByteDance to harness the platform for propaganda or to access the data of the platform's 170 million American users.
Under the terms of the agreement, ByteDance will have a nearly 20% stake in the new U.S. entity, while 15% stakes in the venture will go to Oracle, Silver Lake and MGX. The new entity is expected to be governed by a board with a majority of its directors from the U.S.
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TikTok's Chinese parent company, ByteDance, agreed to divest its U.S. operations to the new entity. (Nicolas Economou/NurPhoto via / Getty Images)
The deal's closing date of Jan. 22 was set when President Donald Trump signed an executive order in September that provided a 120-day delay in enforcing a 2024 law signed by then-President Joe Biden that required ByteDance to divest TikTok's U.S. business or face a ban in the country.
The bipartisan law – known as the Protecting Americans from Foreign Adversary Controlled Applications Act – bans social media apps linked to adversarial foreign governments, such as China, from being available in U.S. app stores.
The law survived a Supreme Court challenge and took effect in January 2025, though Trump signed multiple extensions delaying its implementation to pursue a deal.
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TikTok CEO Shou Chew negotiated the deal to create the social media app's U.S. spinoff. (Shawn Thew/Pool/AFP via Getty Images)
At an event marking Trump's executive order in September, Vice President JD Vance said that TikTok's U.S. business will be valued at around $14 billion in the deal, adding that "the most important thing is that it does protect Americans' data security and ensures TikTok is still accessible."
Vance added that the deal ensures "that the American entity and American investors will actually control the algorithm" and that will prevent it from being used to disseminate foreign governments' propaganda.
President Donald Trump signed several extensions delaying TikTok's ban to allow negotiations on a deal to move forward. (Jabin Botsford/The Washington Post via Getty Images)
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The vice president also noted that the U.S. entity having control over the algorithm was important for fulfilling the national security requirements under the law.