White House Answers Questions About TikTok Deal
The White House has confirmed that as part of the agreement for the transfer of TikTok’s US operations to a majority American-owned group, the app’s algorithm will be operated and monitored in the USA by Oracle.
Details of the Deal
A high-ranking White House official confirmed the detail on Monday in a call to reporters. The deal will transfer control of TikTok’s US business to a new joint venture in the USA, with a majority of American investors and a majority American Board of Directors. Oracle and private equity company Silver Lake will be among the investors, along with global companies already invested in TikTok’s parent company, Bytedance, and new investors.
Investors and Ownership
President Donald Trump said on Sunday that technology and media leaders Michael Dell and Lachlan and Rupert Murdoch could also be part of the new owner group. However, a source familiar with the matter clarified that Fox Corp, not the Murdochs individually, is one of the investors. After the deal, Bytedance will retain less than 20% participation in TikTok US.
Regulatory Permits and Completion
The full group of investors has not yet been completed, and the deal is still waiting for formal regulatory permits from China. However, US leaders are confident that the agreement will be concluded. The White House is progressing to complete the TikTok sale after Trump made known that he made progress on Friday in a call with Chinese President Xi Jinping.
Confidence in the Deal
"We are 100% confident that a deal has been completed," said a White House press spokesman, adding that it would probably be signed "in the coming days". Trump is to sign an executive order later this week, stating that the deal is a qualified sale as required by the prohibition or sales law adopted last year.
Algorithm and National Security
The fate of the algorithm had remained a big question because the content recommendation engine plays a major role in the app’s popularity but is also behind national security concerns. US officials feared that Bytedance could be forced to manipulate the algorithm on behalf of the Chinese government to influence Americans. As part of the deal, Oracle will receive a copy of the algorithm code from Bytedance, check it, and take it over according to US user data, and continuously monitor content to users.
New Owner Group and App
The new owner group will only check the algorithm for US users, raising the question of whether American users will have to download a new, separate app after the deal is completed. The deal extends Oracle’s participation in TikTok and builds on an existing partnership with Bytedance to store TikTok’s US user data in the USA.
Leadership Changes
In a surprising step, Oracle announced that its CEO, Safra Catz, will step down from her role to be replaced by co-CEOs Clay Magouyrk and Mike Sicilia. Catz becomes the executive vice chair of the Board of Directors of Oracle. It is not clear whether the transition is related to the TikTok deal, but the move could clear Catz, also a Trump ally, to take on a leadership role in the new joint venture.
Fees and Participation
The White House has not yet determined whether it will receive a fee for negotiating the TikTok deal, which is expected to be worth billions of dollars. However, the White House will not have a "golden share" or any participation in the new company.
