TikTok has signed a deal to sell its U.S. operations to a consortium of American investors, a source familiar with the matter confirmed to CBS News.

Axios was first to report the deal.

Under a law passed last year, TikTok's China-based parent company, ByteDance, must either sever ties with the social media platform's American operations or lose access to U.S. app stores and web-hosting services. The law set a January 2025 deadline, but President Trump has extended it several times, most recently until Jan. 23, 2026.

In September, Mr. Trump signed an executive order paving the way for a deal brokered by his administration to keep TikTok operating in the U.S. under a new corporate structure with American investors.

At the time, a senior White House official said that under the proposed deal, ByteDance's content recommendation algorithm that powers TikTok will be copied and retrained to run solely on the data of its U.S. user base. Cloud-computing firm Oracle will provide "top to bottom security" by hosting Americans' user data and reviewing the app's code to ensure "the algorithm is behaving appropriately and it's secure," the official said.

The deal will establish a "joint venture" based in the U.S., with a majority of U.S. investors and owners and a majority of Americans on its board of directors, the White House said in September. Mr. Trump's executive order says ByteDance and its affiliates will own less than 20% of the new entity, keeping it below the limit on foreign ownership set by last year's divest-or-ban law.

A consortium of American investors, including Oracle, are expected to have a stake in the new TikTok, the White House previously said. (Oracle was cofounded by Larry Ellison, whose son David Ellison is the chairman and CEO of Paramount Skydance, which is the parent company of CBS. The Ellison family owns a controlling interest in Paramount Skydance.)

Axios reported Thursday that Oracle, Silver Lake and Abu Dhabi-based MGX will collectively own 45% of the U.S. entity. Almost one-third of the new entity will be owned by current ByteDance investors, according to Axios.

When reached by CBS News Thursday, an Oracle spokesperson declined to comment on the deal.

"We feel 100% confident that this proposal, if it's completed, complies with the law," the senior White House official said in September, adding that the White House believes it "complies with all the relevant laws and policies on both sides."

Mr. Trump told reporters that Chinese President Xi Jinping signed off on the deal during a call in September. "He gave us the go-ahead," Mr. Trump said.

China's comments about what has been agreed to have been more vague.

"China's position on the TikTok issue is clear: The Chinese government respects?the wishes of the company in question, and would be happy to see productive commercial negotiations in keeping with market rules lead to?a solution that complies with China's laws and regulations and takes into account the interests of both sides. The U.S. side needs to?provide an open, fair and non-discriminatory environment for Chinese investors," the Chinese government's summary of the September call between Xi and Mr. Trump said.

The sale-or-ban law, which was upheld by the Supreme Court, took effect a day before Mr. Trump's inauguration last January. Mr. Trump, however, has issued new orders every few months directing the Justice Department not to take action or impose penalties against companies like Apple and Google for failing to remove the widely popular app from their platforms.

There's been little pushback from lawmakers, who for years raised concerns about TikTok's potential risks to national security if the Chinese government was able to access the vast amount of Americans' data collected by the app or carry out influence operations through it.

But some are likely to see the deal as not going far enough when it comes to TikTok's algorithm. After the White House announced the deal in September, Republican Rep. John Moolenaar of Michigan, the chairman of the House China committee, expressed concern.

"Transitioning to a majority American-owned entity would mark an important step in that process that could mitigate some of the ByteDance threat depending on the details, but divestment was not the law's only requirement," Moolenaar said in a statement. "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."

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