Oracle would protect TikTok’s algorithm in the United States
Oracle would recreate and provide security for a new U.S. version of TikTok’s algorithm under a deal being hatched to sell the popular Chinese-owned app to a consortium of U.S. investors, a White House official said, addressing a key concern raised by lawmakers in Washington.
The deal, outlined by the White House official in a statement Monday, seeks to ensure that U.S. buyers control TikTok’s recommendation software in the United States following the divestment of its Chinese parent, ByteDance. The owners of the U.S.-based TikTok would rent a copy of the algorithm from ByteDance, which Oracle would retrain “from scratch,” according to the official.
U.S. user data would be stored in a secure cloud run by Oracle with controls in place to keep out foreign adversaries, including China, the official said. ByteDance, based in Beijing, would not have access to the information of TikTok’s U.S. subscribers, nor would it have any control over the algorithm in the United States.
“U.S. security partner Oracle will continuously operate, retrain, and monitor the U.S. algorithm to ensure that content is free from improper manipulation or surveillance,” according to a question-and-answer session that accompanied the official’s remarks.
TikTok’s algorithm has long been a complicating factor in any deal. U.S. law requiring the sale of TikTok prohibits ByteDance from playing any operational role in a new U.S. app, including software. For its part, Chinese legislation prohibits the export of such sensitive technology. It’s unclear whether lawmakers who backed a qualified divestment will accept the algorithm’s plan and whether the approach of completely separating TikTok from ByteDance is technically feasible.
Under the agreement, Oracle will collaborate with the U.S. government on everything from algorithm retraining to application development and source code review, the White House official said. It has not immediately been clear what role the government might have in overseeing the app, its algorithm, and user data.
Details about the security measures were released as President Donald Trump prepared to finalize a long-awaited plan to sell the video platform to a consortium of U.S. buyers. The sale would help Trump fulfill a campaign promise while also removing a sticking point in U.S.-China relations as the world’s two largest economies work to ease tensions over tariffs and export controls.
Trump intends to sign an executive order this week to formalize his approval of the transaction, a White House official said. Last week, Trump expressed confidence that all sides were in agreement. “I had an excellent phone conversation with President Xi and, as you know, I approved the TikTok deal, and we are in the process,” he told reporters on Friday, hours after speaking with his Chinese counterpart, Xi Jinping.
Although Trump indicated that Xi had given his consent, the Chinese Foreign Ministry refrained in a statement on Friday from offering its full support. “The Chinese government respects the wishes of the company in question and would be happy if productive trade negotiations, in accordance 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 ministry said.
To buy more time for the deal, Trump plans to extend ByteDance’s divestment of the company by an additional 120 days, according to the White House official. Trump had signed an order last week extending the deadline by 90 days, until mid-December.
Under the deal, the new U.S. company would be majority-owned by U.S. investors, and ByteDance’s stake would be reduced to below 20% to comply with the law requiring it to relinquish control. Six of the seven seats on TikTok’s U.S.-based board of directors would be held by Americans, the official said. ByteDance would occupy the last position on the board, but would be excluded from the security committee of the new company.
Oracle is one of the investors in a consortium that also includes Andreessen Horowitz and private equity firm Silver Lake Management, Bloomberg reported. Retraining and protecting the algorithm would further expand Oracle’s lucrative relationship with TikTok. The Austin-based company provides cloud services for the app and hosts user data in the U.S. and other countries as part of a multibillion-dollar partnership called the Texas Project.
The plans to protect U.S. user information and recommendation software point to national security concerns shared by Republicans and Democrats in Congress, who passed the law requiring ByteDance to divest itself of the app or face a U.S. ban. Those lawmakers say China could pressure ByteDance to share user data and use the app to spread propaganda, accusations that the company and Beijing authorities have repeatedly rejected.
Lawmakers who supported the TikTok ban have vowed to scrutinize any plans related to the algorithms. Trump has also floated the idea of the U.S. receiving what he described last week as “an ‘additional fee’ just for closing the deal.” The details of that fee structure, including how much the government might keep, remain unclear. On Friday, Trump declined to say whether the U.S. government would get a seat on the board of directors of the new U.S. company.
