The newly elected President Donald Trump's administration is negotiating a plan to secure TikTok’s future in the United States by involving Oracle and a consortium of investors to oversee the short-video sharing app’s global operations. ByteDance, the Chinese parent company of TikTok, would retain a minority stake under the proposal, while Oracle would manage the app’s algorithms, data collection, and updates, according to sources familiar with the discussions.
This deal has the purpose of reducing Chinese ownership and mitigating national security concerns. It'll allow American investors to own a majority stake in TikTok. However, negotiations are ongoing in the U.S.'s White House, and the final terms have not been concluded. The administration puches Oracle to play a key role in monitoring the app’s operations globally and ensuring the app complies with U.S. regulations.
Oracle’s server network is already supplying much of the essential infrastructure that TikTok relies on to operate its platform. TikTok uses Oracle's cloud computing services, which store its users' data, such as videos and user information, and manage and process large amounts of data quickly and efficiently. In other words, Oracle is already handling TikTok's technical operations; this makes the company a qualified bidder for increased oversight or involvement in the app's operations worldwide under the proposed deal.
However, it's worth noting that Oracle's involvement in acquiring TikTok is not new. The company tried to acquire TikTok in 2022 through a partnership with Walmart, but the deal failed due to disagreements over valuation. This time, it's obvious that Walmart has opted out of the negotiations, reportedly due to the high price tag. ByteDance values TikTok’s global business at over $200 billion, making it a significant financial undertaking for any interested parties.
Microsoft has also been mentioned as a potential investor, though representatives from Microsoft, TikTok, and Oracle have declined to comment on the current discussions. White House officials held meetings with Oracle executives last week, with further discussions scheduled in the coming days.
Legal and Political Challenges
The United State's Congress has mandated that TikTok execute a "qualified divestiture" from ByteDance to continue operating in the country. Despite the fact that the social media app missed a January 19 deadline, President Trump issued an executive order that granted a 75-day extension to the app. Legal experts, however, suggest that the order cannot override the deadline set by Congress.
Lawmakers remain sceptical of ByteDance’s potential influence over TikTok. Binding legal agreements ensuring ByteDance cannot covertly control the app are seen as essential to gaining congressional approval. A staffer involved in the talks stressed the need to fully separate TikTok’s operations from ByteDance and block any possible backdoors that could allow access from China.
National security experts have raised concerns that TikTok's data and algorithms might be accessible to Chinese authorities. Sarah Kreps, a technology and foreign policy expert at the Brookings Institution, noted the difficulty of definitively proving the absence of such control.
Previous efforts to secure TikTok’s independence, such as Project Texas during the Biden administration, failed to alleviate these concerns entirely. The Chinese regulators, who usually oppose selling TikTok, seem less likely to block a deal now. Experts think Beijing might use this as a chance to discuss lowering tariffs with the U.S.
TikTok’s Uncertain Future
TikTok still faces challenges despite progress in negotiation. Apple and Google have not added TikTok back to their app stores after it was offline for 14 hours earlier this month. Without their support, TikTok can’t be downloaded on new devices or get software updates, which is definitely affecting its performance. However, Oracle has restored TikTok’s services, trusting Trump’s assurances.
Meanwhile, Apple and Google remain cautious, worried about possible fines due to TikTok’s ties to ByteDance under U.S. laws. Under the TikTok ban law, supporting TikTok while it remains under the control of ByteDance can lead to hundreds of billions of dollars in fines. These fines (a punishment that) could be imposed a year after Trump’s term ends.
Trump’s suggestion that the U.S. claim 50% ownership of TikTok has added confusion to the discussions. Some interpret this as a call for partial nationalisation, while others see it as a push for American investors to hold a majority stake.
The ambiguity has left stakeholders uncertain about the administration’s exact expectations. As negotiations continue, TikTok’s ultimate fate hinges on resolving political, financial, and security concerns. The proposed deal with Oracle may provide a path forward, but many hurdles remain before the popular app can secure its place in the U.S. market.
