In a major development for US-China tech relations, the White House has confirmed that Oracle will oversee TikTok’s recommendation algorithm in the United States following the completion of the pending sale of TikTok’s US operations. This clarifies one of the most critical and previously unanswered questions about the forced divestiture of the popular social media platform. The deal, expected to be formalized in early 2026, will transfer control of TikTok’s US operations to a new joint venture with majority American ownership and management.
Background and Context
TikTok, owned by Beijing-based ByteDance, has faced intense scrutiny from US lawmakers and security officials since 2020 over concerns that the Chinese government could access American user data or influence US citizens through content manipulation. After years of negotiations, threats of bans, and legal challenges, Congress passed legislation in April 2024 that gave ByteDance nine months to sell TikTok’s US operations or face a nationwide ban.
This “ban-or-sell” law was predicated on national security concerns, particularly regarding the potential for the Chinese government to influence or monitor Americans through the platform. The legislation explicitly prohibited “any cooperation with respect to the operation of a content recommendation algorithm” between ByteDance and any new American ownership group.
Deal Structure and Ownership
According to senior White House officials, the forthcoming deal will establish a new joint venture based in the United States with the following characteristics:
Majority American Ownership: The new entity will have predominantly US investors and be governed by a board with a majority of American directors.
Key Investors: Oracle and private equity firm Silver Lake have been confirmed as major stakeholders, while Fox Corporation (not the Murdoch family personally, as initially reported) will also be among the investors.
ByteDance’s Reduced Stake: The Chinese parent company will retain a less than 20% stake in TikTok’s US operations, significantly reducing its control over the platform.
Additional Investors: While the complete investor group has not been finalized, President Trump indicated that technology entrepreneur Michael Dell may also participate in the ownership structure.
Algorithm Control and Data Governance
Perhaps the most significant aspect of the deal involves the handling of TikTok’s algorithm, which has been both the source of the app’s remarkable success and the focal point of national security concerns:
Algorithm Transfer: Under the arrangement, ByteDance will provide a copy of the algorithm’s code to the new US-based joint venture.
Oracle Oversight: Oracle will continuously monitor how the algorithm recommends content to American users, addressing concerns about potential foreign influence operations.
Domestic Data Training: The new ownership group will review the algorithm and retrain it specifically on US user data, creating a more localized experience.
Geographic Limitation: This controlled algorithm will only apply to US users, suggesting the possibility that American users may need to download a new, separate TikTok application once the transition is complete.
The arrangement builds on Oracle’s existing partnership with ByteDance, established in 2022, which already involves storing TikTok’s US user data domestically. Oracle Chairman Larry Ellison, a known ally of President Trump, has been instrumental in developing this relationship.
Timeline and Implementation
The path forward for the TikTok deal now has a clearer timeline:
Executive Order: President Trump is expected to sign an executive order this week formally declaring that the deal constitutes a “qualified divestiture” as required by the ban-or-sell legislation.
Extension Period: The White House will extend the pause on enforcing the ban by an additional 120 days beyond the current December 16, 2025 deadline, allowing time for paperwork and regulatory approvals.
Framework Agreement: ByteDance is expected to sign an agreement outlining the framework of the deal with one or more of the new investors imminently.
Final Completion: With these extensions, the deal is likely to be formally completed in early 2026, concluding a nearly six-year effort to place TikTok under American control.
The deal still awaits some formal regulatory approvals from China, though US officials have expressed confidence that these will be forthcoming following President Trump’s recent call with Chinese President Xi Jinping.
Oracle’s Leadership Transition
In a development that may be related to the TikTok deal, Oracle announced a significant leadership change on Monday. CEO Safra Catz, another Trump ally, will step down from her position to become vice chair of Oracle’s board of directors. She will be replaced by co-CEOs Clay Magouyrk (previously president of Oracle’s cloud infrastructure unit) and Mike Sicilia (previously president of Oracle Industries).
While Oracle has not explicitly connected this transition to the TikTok agreement, analysts have speculated that the move could free Catz to take on a leadership role in the new TikTok joint venture, leveraging her experience and political connections.
Financial Implications
The deal, expected to be worth billions of dollars, represents one of the largest forced technology transfers in recent history. The White House has indicated that it has not yet finalized whether it will take a fee for negotiating the agreement, though officials confirmed the government will not have a “golden share” or other equity stake in the new company.
For ByteDance, which was most recently valued at approximately $225 billion, the partial divestiture represents a significant concession to maintain access to the lucrative US market, where TikTok has more than 170 million monthly active users.
Broader Implications
This landmark agreement carries several important implications for global technology governance:
For US-China Relations
The TikTok deal represents a new model for handling Chinese technology companies operating in the United States, potentially setting a precedent for future cases where national security concerns clash with popular consumer applications. The deal demonstrates a preference for restructuring rather than outright bans, though with significant controls in place.
For Data Sovereignty
The arrangement reinforces the growing trend toward data localization, with countries increasingly requiring that their citizens’ data be stored and processed within their borders. The TikTok case goes further by requiring algorithm localization as well.
For Social Media Regulation
The deal’s focus on algorithm oversight represents an evolution in how governments view social media regulation, shifting from content moderation concerns to deeper questions about recommendation systems and their potential for manipulation.
For Tech Companies
The precedent may cause other international technology companies to proactively restructure their US operations to avoid similar forced divestitures, particularly those with ties to countries viewed as strategic competitors.
Conclusion
After years of uncertainty, the path forward for TikTok in the United States has become significantly clearer. The Oracle-overseen algorithm, combined with majority American ownership, represents a compromise solution that allows the popular platform to continue operating while addressing national security concerns.
However, questions remain about how the user experience might change under the new arrangement, whether American users will need to transition to a new app, and how exactly the algorithm will be monitored. As the deal moves toward completion in early 2026, these details will likely become clearer, shaping not only the future of TikTok but potentially the broader landscape of international technology governance.
Sources: CNN Business, White House briefings, Oracle corporate announcements