Lawmakers in US Congress would need to sign off the final deal
Oracle will assume oversight of a US version of TikTok’s algorithm under a new arrangement designed by President Donald Trump to prevent the app’s ban in the US.
White House officials said Monday the agreement would ensure TikTok’s American business separates from its Beijing-based parent company, ByteDance, and that its recommendation software is rebuilt under US ownership.
As part of the plan, American investors will lease a version of ByteDance’s algorithm, which will then be retrained using US user data.
Oracle will provide cloud storage, security, and technical monitoring to ensure the system is inaccessible from China.
“Oracle will operate in partnership with the US government to ensure safety and data security across the entire TikTok platform – from source code review, to algorithm retraining, to application development and deployment,” a White House official said.
Trump is expected to issue an executive order later this week providing a 120-day window to finalise the deal. That period will cover investor arrangements, board structure, and regulatory approvals from both Washington and Beijing.
The official added that TikTok’s new US entity would operate its algorithm independently, with no sharing of US data outside the country.
ByteDance, while still holding a minority stake, would lose access to both user data and algorithmic control.
The deal comes after months of political wrangling over TikTok’s future in the US.
A federal law requires ByteDance to divest its American operations or face a nationwide ban, amid bipartisan concerns in Congress that the platform’s content-recommendation system could pose national security risks.
Trump has repeatedly delayed the ban, most recently pushing the deadline to 16th December.
Under the expected terms, a US consortium will own 80% of TikTok’s American business, leaving ByteDance with less than 20%.
Existing investors such as General Atlantic and Susquehanna will keep their stakes, while new backers are poised to join.
Media mogul Rupert Murdoch, through Fox Corp, and computer industry pioneer Michael Dell are among those preparing to invest, people familiar with the matter told the Financial Times.
TikTok’s US board will consist of seven directors, six of them American, with ByteDance appointing only one.
Despite earlier speculation, the federal government will not take an equity stake or hold a so-called “golden share,” which would give Trump veto power over key company decisions.
The deal also formalises Oracle’s role as TikTok’s cloud provider, building on an earlier arrangement that already saw the company store data from the app’s roughly 170 million US users.
Oracle has been a long-time contender to anchor the deal. Its chairman Larry Ellison briefly became the world’s richest person earlier this year after a stock rally fuelled by that growth.
President Trump previously suggested Ellison should buy TikTok outright. While this new arrangement falls short of that, it gives Oracle significant control over the app’s technical backbone at a time when AI-driven recommendation systems are considered the crown jewel of social media platforms.
Still, analysts warn the restructuring could have unintended consequences.
Jasmine Enberg, principal social media analyst at eMarketer, said US-only changes to TikTok’s algorithm could alienate users and reduce its value for creators and advertisers.
“Material (or even perceived) changes to the content, algorithm or app policies could prompt massive shifts in user behaviour,” Enberg told the BBC.
“While the details of the deal still aren’t clear, if a US-only algorithm cuts US TikTok users off from content in the rest of the world, that could degrade the user experience.”