Under a deal being negotiated by the White House, the app's algorithm, data collection and software updates will be overseen by Oracle. (Damian Dovarganes/AP)
The Trump administration is working on a plan to save TikTok that involves tapping software company Oracle and a group of outside investors to effectively take control of the app’s global operations, according to two people with direct knowledge of the talks.
Under the deal now being negotiated by the White House, TikTok’s China-based owner ByteDance would retain a minority stake in the company, but the app’s algorithm, data collection and software updates will be overseen by Oracle, which already provides the foundation of TikTok’s web infrastructure.
That would effectively mean American investors would own a majority stake in TikTok, but the terms of the deal could change and are still being hammered out.
“The goal is for Oracle to effectively monitor and provide oversight with what is going on with TikTok,” said the person directly involved in the talks, who was not authorized to speak publicly about the deliberations. “ByteDance wouldn’t completely go away, but it would minimize Chinese ownership.”
NPR has agreed not to name the sources, who are not authorized to speak publicly about the confidential talks.
Other potential investors who are engaged in the talks include Microsoft.
Back in 2020, Trump gave his blessing to a TikTok takeover attempt involving Oracle and Walmart that eventually fell apart. A source close to the discussions said the retailer is, at this point, sitting out after balking at the estimated price of the viral video app.
Officials from Oracle and the White House held a meeting on Friday about a potential deal, and another meeting has been scheduled for next week, according to the source involved in the discussions, who said Oracle is interested in a TikTok stake “in the tens of billions,” but the rest of the deal is in flux.
Spokespeople for Microsoft and Walmart declined to comment. TikTok, Oracle and the White House did not return a request for comment.
When asked about the Oracle talks on Air Force One on Saturday night, Trump denied being in discussions with Oracle’s Larry Ellison about a TikTok takeover.
“Larry is a friend of mine,” Trump said. “I never spoke to Larry about TikTok. I’ve spoken to many people about TikTok. There’s great interest in TikTok,” he said.
While estimates vary on how much TikTok’s global business is worth, negotiators in the White House have said ByteDance believes it could fetch at least $200 billion, putting it well outside the reach of any of the consortium of investors who have been promoting their bids, according to the source involved in the discussions.
Another person who has sat in on conversations with senior White House officials about a TikTok deal said appeasing Congress is seen as a key hurdle.
Under a law passed by Congress and upheld by the Supreme Court, TikTok must execute what is known as “qualified divestiture” from ByteDance in order to stay in business in the U.S. Trump is given wide latitude to interpret what that means, but experts say it could involve ByteDance retaining a minority stake in the company.
The app has passed its Jan. 19 deadline for achieving that splitting off from ByteDance, but President Trump has issued an executive order intended to provide a 75-day extension, though legal experts say the action cannot supersede the now-passed deadline set forth by Congress.
A congressional staffer involved in talks about TikTok’s future, who was not authorized to speak publicly, said binding legal agreements from the White House ensuring ByteDance cannot covertly manipulate the app will prove critical in winning lawmakers’ approval.
“A key part is showing there is no operational relationship with ByteDance, that they do not have control,” the Congressional staffer said. “There needs to be no backdoors where China can potentially gain access.”
Eliminating all potential ways for Chinese authorities to access TikTok’s data and algorithm has been a concern among technology experts for years.
“The question that has always been difficult to answer is how do you prove a negative? How do you prove the absence of Chinese control of data and the algorithm?” said Sarah Kreps, who focuses on technology and foreign policy at the Brookings Institution. “You can audit millions of lines of code, but it’s really hard to show one way or the other.”
A national security plan that also involved Oracle, known as Project Texas — which gained momentum during the Biden administration — fell short of guaranteeing TikTok’s independence from ByteDance, the staffer noted, but would not elaborate, saying it involves a security vulnerability that could have given China access to the data of American users.
The Project Texas proposal to eventually collapsed when Biden officials instead chose to get behind a congressional effort to force ByteDance to sell TikTok, or face a nationwide ban.
In April, Congress attached a divest-or-ban measure to a foreign aid bill. Biden signed the bill. It gave ByteDance until Jan 19. to shed its Chinese owner.
“We gave them nine months to figure out a way to sell,” the congressional staffer said. “But they instead decided to fight it in court, rather than working toward divestiture.”
One thing that is unclear: what exactly Trump means when he has said that the U.S. should be entitled to a 50% ownership of TikTok.
Some have suggested this means Trump is pushing for a partial nationalization of TikTok, others have chalked it up to imprecise language for a situation in which American private investors hold a 50% ownership stake in the company.
“Nobody seems to know what he means with the 50% equity comments,” the source involved in the talks said.
Chinese regulators, who have for years opposed the selling of TikTok, recently signaled that they would not stand in the way of a TikTok ownership change, saying acquisitions “should be independently decided by the enterprises and based on market principles.” The statement, at first, does not seem to say much, but negotiators in the White House believe it indicates that Beijing is not planning to block a deal that gives American investors a majority-stake position in the company.
China experts have said Beijing may be interested in approving a TikTok sale as a negotiating tactic to try to win tariff relief in the White House.
Meanwhile, Apple and Google still have not returned TikTok to app stores after the platform went offline for about 14 hours. Without Apple and Google’s support, the app is deprived of software updates. It also cannot be downloaded on Apple devices, or found in the Google Play app store.
Trump’s executive order was enough for Oracle, and other web infrastructure companies, to restore TikTok’s services. But other companies are not taking a gamble, including Apple and Google.
Under the TikTok ban law, supporting TikTok while it remains under the control of ByteDance can lead to hundreds of billions of dollars in fines, a punishment that can be levied a year after Trump’s term.
“Oracle just has more confidence in Trump’s political assurances,” said Kreps at Brookings. “For Apple and Google, yes, they were invited to the inauguration last week, but where will things stand next week?”
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