Trump has spent the beginning of his second term flouting a bipartisan law, upheld by the Supreme Court, banning the app domestically.
President Donald Trump is expected to sign an executive order later this week declaring that an emerging deal involving the video-sharing app TikTok meets American security needs and constitutes a qualified divestiture under U.S. law, according to people familiar with the matter.
Under the deal, American tech company Oracle will serve as the app’s security provider, which will independently monitor the source code of the app as well as study how a U.S.-controlled copy of the TikTok content recommendation algorithm operates and interacts with phone features and updates.
Oracle will be required to “retrain” a leased duplicate TikTok algorithm and user data will be stored in the U.S. in a cloud controlled and monitored by the company. The lease is different from a sale of the algorithm, which would prohibit ByteDance from operating the video-sharing app in other countries.
“It’s going to be fully inspected and retrained by the security provider on U.S. user data, and then it’s going to be operated by that U.S. entity,” a senior White House official insisted. “It’s going to be continuously monitored as it operates to ensure that it’s behaving appropriately” and “that it’s not being used for any kind of malicious purpose, and that it’s not being unduly influenced.”
The draft deal – which has yet to be signed — would move TikTok U.S. operations into a new joint venture with a majority-American investors, owners, and board of directors, while capping the app’s Chinese-owned parent company ByteDance’s equity stake in American operations at 20 percent in compliance with U.S. law. The U.S. government would not have a stake in TikTok, according to senior officials.
“It’s going to be a mixture of U.S. and global firms who are already invested in ByteDance, basically existing investors, as well as a significant number of new investors who have no affiliation with ByteDance,” a senior White House official said. “The full capitalization table is yet to be set.”
Beyond Oracle, the White House namechecked the private equity firm Silver Lake, as well as a host of other “household names,” without elaborating. Trump said in a Fox News interview over the weekend that Lachlan Murdoch, Rupert Murdoch, and Michael Dell are also expected to be involved.
As things stand, the U.S. government does not have any additional talks planned with Chinese officials surrounding the deal.
The emerging deal comes after Trump has spent the beginning of his second term flouting a bipartisan law banning the app domestically over concerns surrounding the Chinese Communist Party’s control over its algorithm and U.S. user data.
Trump initially supported banning TikTok but reversed course in March of last year. Republican megadonor Jeff Yass is a major investor in ByteDance and was also the biggest shareholder in a shell company, Digital World Acquisition Corporation, that merged with Trump’s social media company around the time of Trump’s reversal, the New York Times reported last year.
Senior White House officials used a Monday call with reporters to insist that President Joe Biden is to blame for not finding a deal before he left office in January 2025 – instead signing a bill in April of last year that set a January 19 divestiture deadline for Chinese-owned parent company to sell TikTok’s algorithm to an American company or let the app go dark on U.S. soil.
Trump has signed multiple deadline extensions, even though the Supreme Court upheld the constitutionality of the bipartisan TikTok ban in January, ruling against the company’s free-speech legal challenges.
China hawks on both sides of the aisle have expressed concern for months that a potential TikTok deal will not meet U.S. security needs, and that China will still have too much control over an algorithm that they worry will influence Americans and user data with manipulated content recommendations.
On Monday’s call with reporters, White House officials acknowledge that this deal required U.S. negotiating officials to find a compromise that meet the requirements of the U.S.’s exiting TikTok law as well as domestic laws in China.
The White House is selling the deal as a win for 170 million American users, as well as the thousands of small business owners who use the app to sell their products. An official estimated on Monday that the TikTok deal will generate “hundreds of billions of dollars of economic activity over the next five years.”