Oracle will spearhead the management of TikTok’s algorithm and security in the US under a new joint venture involving the tech giant, Silver Lake, and potentially investors like Rupert Murdoch and Michael Dell.
This deal is backed by the Trump administration and aims to address concerns over TikTok’s links to its Chinese parent company, ByteDance, reports AP/UNB.
The final agreement is still under negotiation with several stakeholders, including Oracle and Silver Lake, but the US government will not hold equity or have a seat on the venture’s board, according to a senior White House official.
An executive order is expected from President Trump to confirm that the arrangement addresses national security issues.
The deal must also be approved by China, with regulatory reviews still pending.
This initiative is a continuation of efforts to sever TikTok’s US operations from ByteDance due to fears of potential data misuse and manipulation, which have been central to the ongoing US-China trade tensions.
The transition of TikTok’s US operations, led by Oracle and Silver Lake, is expected to extend into the early months of the next year.
This marks a significant delay from the original timeline, which saw Trump repeatedly postponing a ban on the app through bipartisan legislation.
Under the agreement, TikTok’s US operations will receive a licensed version of the core algorithm responsible for curating personalized video feeds for users. Oracle will oversee US user data security.
US officials have voiced concerns about ByteDance’s original algorithm, fearing that it could be influenced by the Chinese government to manipulate content in subtle ways.
A spokesperson for the House Select Committee on China emphasised that any shared algorithm with ByteDance would breach US regulations, stating that the bipartisan law mandates TikTok sever algorithmic connections to its Chinese parent for compliance.
A US official clarified that the licensed algorithm will be retrained using American data to ensure it operates ethically and safely.
However, it remains unclear how much the US version will differ from TikTok in other regions.
Jasmine Enberg, an eMarketer analyst, noted that changes to the algorithm could risk alienating users, as cultural dynamics play a crucial role in social media.
Despite potential modifications to the platform, White House Press Secretary Karoline Leavitt reassured that US users will continue to have access to content from international users, and vice versa.
This development bears some resemblance to Elon Musk’s $44 billion Twitter acquisition, which resulted in significant changes including the company’s rebranding to “X.”
However, any changes to TikTok under this new arrangement are expected to be more gradual and less noticeable.
Oracle and Silver Lake are set to assume major roles in TikTok’s US operations. Oracle, a leader in database and enterprise software, has expanded into cloud infrastructure and AI.
Co-founder Larry Ellison, with a net worth of approximately $390 billion, remains a pivotal figure, with financial ties to Skydance’s $8 billion merger with Paramount, orchestrated by his son, David.
Silver Lake has made key investments in tech, such as Dell and Skype. Michael Dell, the founder of Dell Technologies, could potentially invest in the new TikTok venture, following comments from Trump during a recent Fox News interview. Trump also hinted that media mogul Rupert Murdoch might join the investor group.
Additionally, venture capitalist Marc Andreessen is reportedly interested in joining the investor team. Andreessen was involved in Silver Lake’s acquisition of Skype in 2009.
ByteDance is expected to retain a minority stake of no more than 20% in the new US-based entity, with a governance structure led by American investors. ByteDance will be allowed one board member, but that individual will not have a role in security matters.
