President Donald Trump is expected to sign off on the creation of a new U.S. arm of the popular Chinese social video app TikTok later this week, which would see it continue to use owner ByteDance’s algorithm under the control and supervision of the Big Tech giant Oracle.
Trump has repeatedly extended the deadline for ByteDance to find a new owner in the U.S. or be banned from American app stores in compliance with a 2024 law passed by Congress, a prospect that would have dismayed its 170 million U.S.-based users.
The company refused to sell TikTok outright as it wanted to retain control of its app in other territories, hence the drawn-out struggle to find a solution to the impasse.
A deal with China has now reportedly been reached after a bilateral meeting between American and Chinese delegations in Madrid last week, followed by a call between Trump and Xi Jinping.
The former is now expected to grant one final 120-day extension to allow for the completion of the deal, which was initially supposed to have been completed by January this year.
Ahead of a formal announcement from Trump, a senior White House official told The Independent that TikTok U.S. would be controlled by an American-majority investor group led by Andreessen Horowitz, the private equity firm Silver Lake and Oracle.
As part of the agreement in its current shape, TikTok U.S. will lease a duplicated version of the platform’s existing algorithm from ByteDance, rather than build a new one, with Oracle tasked with “retraining” it and safeguarding U.S. users’ data stored in its servers in the interest of national security.
Explaining the rationale behind the approach, the official said: “We had to come up with a compromise that meets both the requirements of U.S. law as well as the domestic law in China.
“This proposal will bring the algorithm under the control of the U.S. joint venture… 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.
“It’s going to be continuously monitored as it operates, to ensure that it’s behaving appropriately, that it’s not being used for any kind of malicious purpose, and that it’s not being unduly influenced. So that is how the algorithm is going to be treated.”
The official said that the deal as a whole would keep the app “safe and secure,” protect thousands of U.S. jobs, and generate hundreds of billions of dollars in economic activity.
They further explained that TikTok U.S.’s American-majority board would consist of new investors, existing ByteDance investors, and one ByteDance representative, but no member of the U.S. government. However, that prospect was raised and rejected, according to Axios.
Trump himself revealed in an interview on Fox News on Sunday that Michael Dell, Lachlan Murdoch, and Rupert Murdoch are expected to be part of the investment group behind the venture.
The shift in ownership is not expected to be visible to current American users of the app and will not require them to re-download it.
Several tech commenters on X nevertheless expressed concern about the ongoing use of the Chinese algorithm, with one Republican calling the detail “the whole ballgame” and branding China’s ongoing involvement akin to “digital fentanyl.”
Others branded Beijing “the real winner” for securing ongoing ownership over the technology.
