In a partnership announced Monday by President Donald Trump’s administration, tech behemoth Oracle will lead U.S. oversight of the algorithm and security behind TikTok’s well-known video platform.
Oracle, investment firm Silver Lake Partners, and potentially two billionaires, media tycoon Rupert Murdoch and personal computer pioneer Michael Dell, are among the joint venture partners who still need to finalize all the details.
According to a senior White House official, the U.S. administration would not own any shares in the joint venture or serve on its board.
The senior White House official stated that later this week, President Trump is anticipated to release an executive order stating that the conditions of the agreement satisfy the security requirements outlined by the legislation.
The framework plan has not yet been approved by China, and regulatory approval is still needed for any final agreement.
A long-running attempt to seize TikTok’s U.S. operations from its parent firm, ByteDance, based in Beijing, due to national security concerns is intended to be resolved by the plan.
Conversations between Trump and Chinese President Xi Jinping have made TikTok a prominent issue as the two continue to argue about a trade war that has affected the world economy for the most of the year.
The two parties are currently working on a framework agreement that calls for a group of investors, including Oracle and Silver Lake, to acquire TikTok’s U.S. operations.
According to a timeline set out by the Trump administration on Monday, this process may not be finished until early next year.
That would imply that TikTok’s divestment won’t be finished until a year after the company was set to be outlawed by a law that had bipartisan support but was consistently blocked by Trump.
A licensed copy of the recommendation algorithm that keeps TikTok users continually scrolling through clips on their smartphones would be given to the new U.S. joint venture under the parameters of the current proposal.
Oracle would examine, keep an eye on, and protect American data flowing through the service.
In the past, US officials have cautioned that Chinese authorities could manipulate ByteDance’s algorithm to reshape information on the platform in ways that are hard to identify.
If the algorithm is Chinese, it would not be compliant. No algorithm can be shared with ByteDance,” a representative for the House Select Committee on China stated.
One of the main points of contention in the TikTok security discussion has been the algorithm.
China previously insisted that the algorithm must continue to be governed by Chinese legislation.
However, a U.S. rule that was approved by the parties stipulates that any divestiture of TikTok must result in the platform severing its connection with ByteDance, specifically its algorithm.
A Trump administration official stated that the licensed copy will be “retrained” with U.S. data to ensure the system is “behaving appropriately,” though specifics are still unclear. As a result, it remains unclear whether the TikTok version in the United States will differ from what people are currently seeing globally.
According to Jasmine Enberg, an analyst for the research firm eMarketer, any significant modifications made to a social media platform’s service increase the danger of losing its audience.
It’s still unclear how users will adjust to new ownership and even a new version of the app, as social media is as much about culture as it is about technology, according to Enberg.
White House press secretary Karoline Leavitt stated during a briefing on Monday that the experience will remain unchanged despite the change in leadership.
According to Leavitt, “TikTok users in the United States will be able to see videos posted by users in other countries and vice versa.”
After completing his $44 billion buyout of Twitter almost three years ago, billionaire Elon Musk sparked an almost immediate reaction, demonstrating how a change of leadership can transform a once-popular social media company.
However, Musk made some very noticeable adjustments, such as finally abandoning the Twitter name and renaming it X.
The majority of TikTok’s users may not notice the slow adjustments that take place as new data is added to the U.S. version of the app’s algorithm.
For the time being, it is evident that, should the Trump administration finalize the deal, Oracle and Silver Lake will both play significant roles in TikTok’s future in the United States.
Database software, which helps handle a wide range of information essential to business, was the foundation of Oracle’s success when it was founded about 50 years ago.
Since then, the company has expanded into hardware, including data centers that support artificial intelligence.
Larry Ellison, a co-founder of Oracle, is still a prominent executive and manages an estimated $390 billion in personal wealth, while no longer serving as the company’s CEO.
After helping finance Skydance’s recent $8 billion merger with Paramount, which his son David arranged, Ellison, 81, may now be poised to become a behind-the-scenes media power player.
With previous acquisitions of Dell Computer and the now-defunct video calling service Skype, Silver Lake has long been involved in IT transactions.
In a recent interview with Fox News, Trump stated that Michael Dell, the founder of Dell Technologies, might become a stakeholder in the U.S. joint venture that is overseeing TikTok.
Trump also brought up the possibility of working with Murdoch, whose business controls Fox News, as a potential investor in the joint venture.
Marc Andreessen, a venture capitalist and another billionaire, is reportedly trying to join the investor club, according to several media sources.
Andreessen also participated in the 2009 acquisition of Skype by Silver Lake.
In the U.S. joint venture, ByteDance is anticipated to hold a 20% or less interest, with the U.S. investors controlling the board.
One person will serve as ByteDance’s representative on the board, but they will not be allowed to join TikTok’s security committee.
