The Trump administration is evaluating a proposal that may resolve TikTok’s legal issues by leasing the app’s algorithm from its Beijing-based owner, ByteDance. This information comes from an individual directly involved in the discussions but not authorized to speak publicly.
The proposed plan involves establishing a new U.S. entity led by Oracle, a major software company. ByteDance would maintain a minority ownership stake under this arrangement. This algorithm leasing proposal has sparked debate within the White House, with some concern among China hawks about whether it effectively removes ByteDance’s operational control over the app. This development occurs amidst heightened tensions, with the Trump administration recently announcing a 34% tariff on Chinese goods.
Trump has set a deadline for TikTok to be sold by Saturday, leading to increased interest from potential bidders, including one group led by Amazon. However, White House negotiators are reportedly not seriously considering these bids. Under the proposal, Oracle, which already handles most of TikTok’s backend technical support, would oversee the new entity. The aim is to prevent any potential backdoor access for the Chinese government to the data of millions of American users. The negotiations have primarily focused on the safety of user data rather than the algorithm itself.
The new plan, reminiscent of “Project Texas” initiated during Trump’s first term, envisions Oracle as a custodian of TikTok’s data, conducting regular audits of the app’s algorithm. Previously, the project proposed a “kill switch” that would allow U.S. officials to shut down the platform if national security concerns were not addressed. However, the current proposal does not include such a measure.
While White House Press Secretary Karoline Leavitt did not comment on the Oracle plan, she stated that any TikTok deal announcement would come directly from President Trump. A potential agreement could offer relief to TikTok, which faced a federal law mandating its separation from ByteDance due to national security concerns. The app has been embroiled in legal challenges concerning this ban, but the Supreme Court recently upheld the law.
Despite these legal hurdles, Trump has extended the deadline for the ban, allowing TikTok to continue operating temporarily. The app returned online after a short outage, following Trump’s promise to delay the ban once he took office. On Inauguration Day, Trump signed an executive order extending the ban’s implementation by 75 days and offered immunity to other tech companies providing backend services for TikTok, including Apple and Google.
Legal analysts suggest that Trump’s postponements do not negate the ban, technically rendering TikTok’s operation in the U.S. with Chinese ties illegal. However, ongoing assurances from Trump and his administration suggest that American authorities will not enforce the law, allowing TikTok to remain operational.
Since January, Trump has noted significant interest from potential buyers of TikTok, describing the app as a valuable asset for reaching a large audience of young internet users. In January, NPR reported that cloud computing firm Oracle had emerged as a leading contender in a coalition of investors possibly acquiring a substantial stake in TikTok’s U.S. operations. Oracle is led by Larry Ellison, a billionaire Republican donor and long-time Trump supporter.
