Oracle 's stock jumped 8% Friday after the cloud provider joined a group of investors slated to lead TikTok's U.S. operations.
In a memo to employees Thursday, TikTok CEO Shou Zi Chew said the social media company's U.S. division will be run by a joint venture that includes Oracle, Silver Lake and Abu Dhabi-based MGX. The deal is expected to close on Jan. 22.
The agreement prevents the popular social platform from getting banned after President Joe Biden signed a law requiring a divestiture of the company's U.S. unit due to national security concerns.
President Donald Trump extended the deadline for a deal on multiple occasions and signed an executive order in September that approved a potential plan for China-based ByteDance to divest.
Oracle will be tasked with auditing and validating that TikTok follows "agreed upon National Security Terms," according to the memo.
China has not publicly confirmed the investment deal, but reports in Chinese state media suggest that the deal will go through, CNBC's Eunice Yoon said. State-run media reported comments from a pro-Beijing professor, who said the deal was in line with the country's laws and is "not a sale of the algorithm.