Tech giant Oracle is set to provide security for a US version of TikTok’s algorithm, the White House said on Monday, under a deal for the sale of the Chinese-owned app’s American operations.
The proposal moves TikTok’s US operations into a new joint venture based in the United States, a senior White House official told reporters, adding that the entity would involve a “majority-American board of directors.”
Oracle, in turn, is expected to serve as a security provider.
The agreement provides that a copy of TikTok’s content recommendation algorithm be brought into the US joint venture system, the official said.
“It’s going to be fully inspected and retrained by the security provider on US user data, and then it’s going to be operated by that US entity,” the official added, speaking on condition of anonymity.
Washington has forcefully sought to take TikTok’s US operations from the hands of the Chinese parent company ByteDance over national security reasons.
Under President Donald Trump’s predecessor Joe Biden, Congress passed a law to force ByteDance to sell its US operations or face a ban of the hugely popular platform.
US policymakers, including Trump in his first presidency, have warned that China could use TikTok to mine data from Americans or exert influence on what they see on social media.
On Monday, a US official said the algorithm would be “continuously monitored” to ensure it is “not being unduly influenced.”
The latest updates came after Trump hailed progress Friday with Chinese President Xi Jinping on issues including TikTok after both leaders spoke by telephone for the second time since Trump’s return to the presidency.
Trump is expected to sign an executive order this week, declaring that the terms of the TikTok deal meet US national security needs, the US official said Monday.
White House Press Secretary Karoline Leavitt told Fox News over the weekend that “there will be seven seats on the board that controls the app in the United States, and six of those seats will be Americans.”
Trump separately added that media mogul Rupert Murdoch and his eldest son, Lachlan, could be among the investors who will take control of TikTok in the United States.
Trump’s TikTok deal will satisfy 2024 law requirements, official says
Meanwhile, Trump will sign an executive order later this week that declares that a deal to divest TikTok’s US operations from its Chinese owner ByteDance will meet requirements set out in a 2024 law, a White House official said.
The US is confident that China has approved the deal and does not plan further talks with Beijing about its details, the official told reporters on a conference call, but added that additional paperwork is required from both sides to approve the deal.
The official added that the valuation of TikTok’s US assets will be “many billions of dollars.” The US government will not take a board seat or get a golden share in the new entity that will own TikTok US, but it is unclear if the US government will get payments as a condition of approval.
ByteDance will own less than 20 per cent while TikTok US will be controlled by a mix of its existing US and global firms as well as a significant number of new investors who have no affiliation with ByteDance, the official said.
The full slate of investors is not yet finalized, but will include major firms like Oracle and private equity firm Silver Lake.
Trump said on Sunday that media mogul Lachlan Murdoch and business leaders Larry Ellison and Michael Dell would be involved as US investors in a proposed deal to keep TikTok operating in the United States.
Trump is trying to keep the short video app with 170 million US users from being banned after Congress passed a law that ordered it shut down by January 2025 if its US assets were not sold by the owner ByteDance.
Trump has delayed enforcement of the law through mid-December amid efforts to extract TikTok’s US assets from the global platform, line up American investors and ensure that the new ownership qualifies as a full divestiture needed under the 2024 law.
Trump’s executive order will include a new 120-day enforcement pause to allow the investors and ByteDance to close the agreement, the official added.
Last week’s progress toward a deal on TikTok marked a rare breakthrough in months-long talks between the world’s two biggest economies that have sought to defuse a wide-ranging trade war that has unnerved global markets.
