The sale of TikTok to a consortium of American investors is taking shape. President Donald Trump has agreed to the plan, but it may not be finalized until early next year.
Trump is extending the deadline by 120 days so that regulators in both the United States and China can give their approval. The core of the deal is that Oracle will oversee the app’s sensitive recommendation algorithm, with which Washington wants to definitively exclude the influence of the Chinese parent company ByteDance.
The agreement provides for the establishment of a new American company in which a majority of shareholders and board members will come from the US. Oracle and investor Silver Lake are the most prominent names involved, supplemented by existing international shareholders in ByteDance and new investors, including Fox Corp. ByteDance itself will retain less than 20 percent of the shares, shifting control firmly to American parties.
Oracle will maintain permanent oversight
The recommendation algorithm, which determines TikTok’s popularity, will remain within US borders. The new entity will receive a copy of the algorithm code, which will be completely revised and retrained with data from US users. Oracle will maintain permanent oversight and monitor how the algorithm distributes content. The US ban-or-sale law prohibits any form of cooperation with ByteDance on the operation of the recommendation software, thereby minimizing the Chinese company’s involvement.
The storage of user data will also come under US control. All data from TikTok users in the US will be stored in an Oracle cloud environment. This builds on earlier initiatives under the name Project Texas, but the new structure goes further by placing the algorithmic core of the app in US hands.
It is not yet clear whether US users will have to download a new app after the restructuring. What is certain is that the reorganization is intended to prevent Beijing from exerting influence on the algorithm via ByteDance, for example to influence public opinion. It is precisely this risk that has been a cause for concern among US politicians for years.
Trump wants to officially recognize the sale as a mandatory divestiture under the ban-or-sale law with a presidential decree. At the same time, he is extending the deadline to December 16, which means the deal is unlikely to be finalized until early 2026. The value of the transaction is estimated to be in the billions of dollars. The White House will not take a stake in the new company, but is investigating whether it can charge a fee for its role in the negotiations.
Oracle’s top woman steps down
It is noteworthy that Oracle’s top executive Safra Catz is stepping down and making way for two new co-CEOs. She will become vice-chair of the board of directors. It is unclear whether this move is related to the TikTok deal. It may give her room to play a role in the new American TikTok company.
For Trump, the sale offers an opportunity to fulfill an election promise and at the same time reduce a point of contention in the relationship with China. For Oracle, the deal represents a strategic expansion of its position as a cloud partner in a highly politically sensitive context.