TikTok Signs Agreements With Investors in Step Toward Avoiding a U.S. Ban

The Chinese-owned video app formalized commitments from the software giant Oracle and two investment firms as part of a deal to keep operating in the United States.

TikTok’s chief executive told employees on Thursday that the company had signed agreements with three major new investors to help form an American version of TikTok, bringing it one step closer to completing a deal to keep the app operating in the United States, according to an internal memo reviewed by The New York Times.

The agreements do not mean that a deal for an American version of TikTok is done, as these investors would form only 45 percent of the new ownership. It’s not clear where the rest of the deal stands.

In the memo, the chief executive, Shou Chew, said TikTok and its Chinese parent company, ByteDance, had signed binding agreements with the software giant Oracle; Silver Lake, an investment company; and MGX, an Emirati investment firm. Those three and other investors would run a new version of the popular short-form video app.

“There’s more work to be done,” Mr. Chew wrote.

The deal is an attempt to comply with a federal law that requires TikTok to reduce its Chinese ownership or face a ban in the United States. It was passed last year out of concern that Beijing could use the app to gain access to Americans’ sensitive data or to spread propaganda. President Trump has repeatedly delayed enforcement of the ban.

The agreements bring TikTok, one of the country’s most popular social media apps, closer to resolving more than six years of questions about its future. TikTok has more than 170 million users in the United States, and exerts powerful influence over culture, conversation and politics in the country.

TikTok and Silver Lake declined to comment. A spokeswoman for Vice President JD Vance, who has managed the sale process for the White House, did not immediately respond to a request for comment. Oracle and MGX did not immediately respond to requests for comment.

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The investor mix described in the memo mirrors a version of the deal described in September by people familiar with the talks. Fifty percent of the new American TikTok entity will be held by new investors, with Oracle, Silver Lake and MGX each taking a 15 percent stake, the memo said. It isn’t clear which new investor or investors would take the other 5 percent.

Affiliates of some existing investors in ByteDance would hold 30.1 percent of the new company, and ByteDance would hold the remaining 19.9 percent. The federal law calls for no more than 20 percent of TikTok to be owned by people or corporations in China.

It’s not clear how high the deal would value the American version of TikTok. Mr. Vance said in September that a U.S. TikTok company would be valued at $14 billion.

The new consortium will be responsible for safeguarding American user data, which will be stored in a cloud system run by Oracle. It will also retrain TikTok’s powerful recommendation algorithm on American user data to make sure the content on the app is protected. The investor group would also make content moderation decisions.

Beijing’s assent is seen as necessary to close the deal. In 2020, China amended its export rules to include technology like the powerful recommendation engine that continually serves new videos to people scrolling TikTok. The effect was to give the Chinese government the power to approve or reject any deal involving the licensing of its technology.

Mr. Trump said in September that China’s top leader, Xi Jinping, had signed off on the framework for a TikTok agreement in a phone call. A readout of the call from a Chinese state-run news agency was more vague, but Mr. Xi appeared to support a commercial solution to TikTok.

Mr. Chew’s memo suggested that the deal would close on Jan. 22, just one day before the latest deadline for TikTok to find a new owner or go dark in the United States.

David McCabe contributed reporting.

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