TikTok Agrees to Sell U.S. Operations to American-Led Consortium Ahead of Divestment Deadline

Washington — TikTok has reached an agreement to transfer its U.S. operations to a consortium of American investors, a source familiar with the negotiations told CBS News. Axios first reported the deal.

The move responds to a law passed last year that requires ByteDance, TikTok's China-based parent company, to divest its U.S. business or face removal from American app stores and web-hosting platforms. The statute originally set a January 2025 deadline; the White House has extended the enforcement date several times, most recently to Jan. 23, 2026.

Deal Structure and Security Safeguards

Under the proposed arrangement, the transaction would create a U.S.-based joint venture with majority ownership by American investors and a majority-American board of directors. The White House said ByteDance and its affiliates would hold less than 20% of the new entity to comply with the divest-or-ban law.

A senior White House official said the plan calls for ByteDance's recommendation algorithm — the system that personalizes TikTok's feed — to be copied and retrained so it runs exclusively on data from U.S. users. Cloud-computing firm Oracle is expected to host U.S. user data and review the app's code to confirm the algorithm is operating appropriately and that user data is secure.

Who Would Own the New Company?

Axios reported that Oracle, private equity firm Silver Lake and Abu Dhabi-based MGX would together hold about 45% of the new U.S. company, while nearly one-third would remain with current ByteDance investors. Oracle confirmed no comment when contacted by CBS News.

Some reporting noted a business link worth disclosing: Oracle was co-founded by Larry Ellison; members of the Ellison family have investments in the media sector, a connection disclosed by some outlets given CBS's coverage.

Reactions and Outstanding Questions

The White House has said it is confident the proposal complies with relevant U.S. laws and policies. President Trump told reporters that Chinese President Xi Jinping signaled approval for the transaction during a September call, saying "He gave us the go-ahead." Beijing's official summary of the call offered a more measured statement, emphasizing respect for commercial negotiations that comply with Chinese law and fair treatment for Chinese investors.

"We feel 100% confident that this proposal, if it's completed, complies with the law," a senior White House official said in September.

Congressional reaction has been mixed. Lawmakers who pushed the divest-or-ban law argued it addresses national security concerns about potential access by the Chinese government to Americans' data or the use of the platform for influence operations. But critics say the proposed transaction may not fully prevent ByteDance from influencing TikTok's recommendation algorithm.

After the White House outlined the framework in September, Rep. John Moolenaar (R-Mich.), chairman of the House China Committee, warned that divestment alone might not meet the law's full requirements. "The law also set firm guardrails that prohibit cooperation between ByteDance and any prospective TikTok successor on the all-important recommendation algorithm, as well as preclude operational ties between the new entity and ByteDance," he said.

The divest-or-ban statute was upheld by the Supreme Court and took effect the day before President Trump's inauguration last January. Since then, the administration has issued temporary orders directing the Justice Department not to force app-platform removals while negotiations proceed. Key details of the deal — including final investor lists, precise governance terms, and mechanisms to enforce algorithmic separation — remain undisclosed, leaving open questions about implementation, oversight and Beijing's final stance.