Oracle is reportedly leading efforts to prevent a ban on TikTok in the U.S. by negotiating a deal that would involve providing security assurances in exchange for a minor stake in the app’s U.S. operations, according to Bloomberg. This plan emerged from discussions within the Trump administration last week.
Oracle steps in to keep TikTok running in the U.S.: Here’s what’s at stake
The proposed agreement would ensure that an updated U.S. version of TikTok would not include a backdoor that the Chinese government could exploit. However, it may allow TikTok’s algorithm to remain under the control of its Chinese parent company, ByteDance. Sources indicate that Chinese authorities are aware of this potential deal and would likely approve it only if TikTok’s algorithm stays fully under China’s control.
This initiative comes less than three weeks before a deadline set by U.S. law that requires ByteDance to divest from TikTok to address national security concerns. An order issued by President Donald Trump on his first day in office postponed this enforcement until April 5, aiming to facilitate a deal that would allow TikTok to continue operating in the U.S.
Oracle has previously collaborated with TikTok through a partnership known as Project Texas, which aimed to secure U.S. user data. Despite this initiative, allegations have arisen claiming that Chinese employees had access to U.S. user data and that the project’s impact was “largely cosmetic.” An appeals court ruling last December noted that TikTok had not satisfactorily alleviated the government’s concerns regarding national security.
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Neither TikTok nor Oracle provided comments in response to requests from various media outlets regarding the current discussions. Vice President JD Vance indicated last week that a high-level agreement addressing national security concerns might be imminent by the deadline.
The negotiations would not only require approval from Trump but also from ByteDance and the Chinese government. Allowing ByteDance to retain control over the algorithm may facilitate agreement from the company and Chinese authorities but could possibly violate U.S. legal requirements established under President Joe Biden.
The U.S. market is vital for TikTok, which was valued as high as $50 billion last year. While publicly known bidders include a group led by billionaire Frank McCourt and Reddit co-founder Alexis Ohanian, skepticism exists about whether ByteDance or the Chinese government would agree to a sale of its U.S. operations.
Speculation has surfaced regarding other potential bidders, including a group that could involve Microsoft Corp. and Oracle founder Larry Ellison. However, the likelihood of a complete acquisition by Oracle appears low as the company currently focuses on its cloud infrastructure endeavors.
Oracle was initially Trump’s choice to acquire TikTok back in 2020 during earlier attempts to regulate the app due to national security issues. Previous efforts to have ByteDance sell its U.S. assets to a consortium that included Oracle and Walmart fell apart amid legal challenges and pandemic complications.
In 2024, Oracle’s annual revenue from TikTok is estimated to be between $500 million and $800 million. The company was selected to help safeguard sensitive U.S. user data, though this arrangement has not fully assuaged regulatory concerns in Washington.
As discussions continue, Trump has softened previous demands for a TikTok ban, highlighting the app’s role in engaging younger voters for his 2024 presidential campaign. New discussions on TikTok’s future are overseen by Vice President JD Vance and advisors in the administration.
Vance expressed optimism about reaching a “high-level agreement” that would allow TikTok to operate while protecting user data and national security. He noted the intention to ensure that TikTok continues its operations with safeguards for Americans’ data privacy.
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