A recent file photo of TikTok’s offices in Culver City, Calif. The future of the popular social media app hangs in the balance as it seeks a buyer to adhere to new federal regulations requiring divestment from Chinese ownership.
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Rumors are circulating about a potential agreement that could alleviate TikTok’s legal uncertainties involving leasing the app’s algorithm from ByteDance, its Beijing-based parent company. This involved source is unable to comment publicly on the matter.
According to reports, a new U.S. entity would be established under the leadership of Oracle, while ByteDance would retain a minority share.
This algorithm leasing proposition has sparked controversy within the White House, with discussions among officials questioning whether it effectively removes ByteDance’s operational control over the app. However, it may sidestep the requirement for Chinese approval during a period marked by a 34% tariff imposed on Chinese imports.
President Trump has issued a sell-by deadline for TikTok by this upcoming Saturday.
In the lead-up to this deadline, several new bidders have emerged, including a notable proposal led by a major tech company. However, sources indicate that White House negotiators are not taking this offer seriously.
Oracle, which currently provides TikTok with essential backend technical support, would oversee the new entity to ensure there are no unauthorized data access points for the Chinese government. The discussions have reportedly prioritized the security of American users’ personal data over the algorithm itself.
“The concern regarding the algorithm has diminished among Washington officials. The primary focus remains on data security,” the source stated, comparing the current situation to previous plans involving Oracle as a custodian of TikTok’s data.
The prior arrangement included provisions for audits of the app’s algorithm and a “kill switch” allowing U.S. authorities to deactivate the platform if national security conditions were unmet. However, this new leasing proposal does not offer similar control mechanisms.
White House press secretary Karoline Leavitt declined to provide details on the Oracle plan but noted that any announcement regarding a TikTok deal would come directly from President Trump.
A finalized agreement would provide a significant relief for TikTok, which has faced numerous challenges this year, particularly following a federal law that mandates the app’s separation from ByteDance, enacted due to national security concerns.
This bipartisan legislation raised alarms about the control of a platform used by over half of the American population potentially being held by a foreign adversary. Despite challenges, the legislation was upheld by the Supreme Court earlier this year.
In January, TikTok experienced a temporary suspension just before the law’s enforcement, but resumed operations after Trump delayed the implementation upon his inauguration.
Legal experts note that delays instituted by Trump do not stop the impending ban, indicating that TikTok’s operation within the U.S. remains at risk unless divested from Chinese ownership. Yet, assurances from Trump’s administration have allowed the app to continue functioning despite the law’s restrictions.
Trump recently acknowledged considerable interest from potential buyers, considering TikTok’s user base of more than 170 million Americans a significant asset for any entity aiming to engage a younger audience.
It has been reported that cloud computing giant Oracle is a frontrunner selected by the administration to lead a consortium of investors seeking to acquire a substantial stake in TikTok’s U.S. operations.
Oracle is led by Larry Ellison, a billionaire and notable supporter of Trump.
