TikTok’s U.S. deal, backed by Oracle and Silver Lake, faces scrutiny as ByteDance retains a stake, raising concerns over national security and algorithm control.
A complicated and fraught deal to save TikTok’s future in the US is taking form, but its architecture is already facing Washington’s fierce glare.
Per sources, a deal greenlit by President Donald Trump would have TikTok’s Chinese parent, ByteDance, continue to play a substantial role in the app’s U.S. business — something critics say won’t meet national security needs.
The bid, backed by a group of investors including Oracle and Silver Lake, seeks to resolve the years-old geopolitical impasse surrounding the app. But by falling short of a complete divestiture, it lays the groundwork for a future showdown with Congress.
Unpacking the deal–a two-parter
The deal’s architecture is complex, essentially dividing TikTok’s U.S. operations into two separate organizations:
1. A new joint venture for data and algorithms
- This new company would handle the most sensitive aspects of the business: U.S. user data and TikTok’s potent content recommendation algorithm.
- Although investors such as Oracle will participate, ByteDance will continue to be the largest single minority stakeholder in this venture.
2. A ByteDance-Owned Revenue Engine
- A distinct entity, to be entirely owned by ByteDance, would oversee the revenue-producing business activities, for instance, e-commerce and advertising.
This two-pronged approach seems geared toward walled-off American user data, while enabling ByteDance to still own a piece of the lucrative U.S. market, which VP JD Vance estimated to be approximately $14 billion in value.
Tightrope walking on national security
This tangled web is already setting off alarms for legislators. The key question is if the deal is, in fact, a true divestiture, as required under 2024 law, which necessitated ByteDance to divest its U.S. operation in full or be banned.
ByteDance’s ongoing role, particularly as a shareholder for the party managing the algorithm, remains a sticking point. Rep. John Moolenaar, the Republican chair of the House Select Committee on China, has already promised “full oversight” of the agreement.
The law also established strict guardrails that do not allow collaboration between ByteDance and any potential TikTok successor on the critically important recommendation algorithm, Moolenaar stressed, adding that the agreement must prevent operational connections between ByteDance and the new entity.
The Political Factor
The White House’s blessing of the plan highlights the high political stakes. President Trump has repeatedly emphasized TikTok’s significance in connecting with young voters and praised the platform, which has 170 million US users, for helping his re-election win last year.
With 15 million followers on his personal account and an official White House presence on the app, saving TikTok is an obvious political priority.
An Uncertain Path Forward
Although the outline is approved by the President, sources warn that the architecture remains under negotiation and may shift.
The sensitivity of the negotiations was emphasized earlier this week when Chinese media outlets LatePost and Caixin published, and retracted, reports outlining a similar two-step structure.
Your proposal is a brilliant way of trying to solve a complicated geopolitical puzzle. Yet with Congress ready to contest its conditions, the final destiny of TikTok in its biggest outside market is anything but determined. The next few weeks will be decisive in knowing if this complex approach can appease both business interests and U.S. national security’s exacting requirements.
FAQs (SEO-Friendly)
What is the structure of TikTok’s proposed U.S. deal?
The deal divides TikTok’s U.S. operations into two entities: a joint venture for data and algorithms and a ByteDance-owned revenue engine.
Why is ByteDance’s ongoing role controversial?
Critics argue that retaining ByteDance as a minority stakeholder could compromise U.S. national security and algorithm control.
Who are the investors involved in the TikTok deal?
Oracle and Silver Lake are the primary investors backing the U.S. deal.
How many U.S. users does TikTok have?
TikTok has approximately 170 million U.S. users, making it a significant social media platform.
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