In a move that has been years in the making, President Donald Trump signed an executive order on September 25, 2025, that formally sets in motion the transfer of TikTok’s U.S. operations from China-based ByteDance to a new American-controlled entity. The $14 billion deal, which has been described as a historic shift in the social media landscape, comes after four extensions of the statutory deadline to either ban TikTok or force its Chinese owners to divest, according to Project Syndicate and Yahoo Finance.
On the surface, the agreement seems like a resounding victory for American interests. Oracle, along with a powerful consortium of U.S. investors—including Andreessen Horowitz, Silver Lake, and high-profile figures such as Larry Ellison, Michael Dell, and Rupert Murdoch—will control 80% of a newly established American entity tasked with running TikTok’s U.S. operations. All U.S. user data is set to remain on Oracle’s servers in Texas, and the new company will license TikTok’s much-coveted recommendation algorithms, retraining them exclusively on American data. Six out of seven board seats will be held by Americans, and the deal even comes with a multibillion-dollar payment from investors—a fee for brokering the settlement with ByteDance and the Chinese government.
But as with most things involving global technology and geopolitics, the devil is in the details. While the U.S. investors will own the lion’s share of the new entity, ByteDance will retain just under 20%—still making it the single largest shareholder. More importantly, the intellectual property underpinning TikTok’s powerful recommendation algorithms remains firmly in ByteDance’s hands. Oracle and its partners are not acquiring the algorithm outright; instead, they will only receive a licensed copy, which they must retrain and maintain on U.S. data.
This arrangement raises thorny questions about long-term control and security. As Michael Sobolik of the Hudson Institute pointed out to Yahoo Finance, "When they talk about Oracle providing security, that introduces the question of security from what?" The real issue, Sobolik argued, is whether the U.S. can ever truly secure and exercise full control over the app’s algorithm and user data. Oracle’s role, as described by a senior White House official, is to provide "top-to-bottom security," inspecting the algorithm down to the source code. But crucially, Oracle will not have the ability to rewrite the underlying algorithm, serving more as a gatekeeper than an owner.
To complicate matters further, algorithms are not static assets. They require constant retraining, fine-tuning, and engineering support to stay effective. This means that the American TikTok will remain dependent on ByteDance—and by extension, China—for periodic updates. Since 2020, China has classified personalized recommendation algorithms as sensitive technology under its export-control regime. Every export of updates or improvements to TikTok’s algorithm now requires Chinese government approval. As Project Syndicate notes, this gives Beijing significant leverage: should tensions flare over issues like Taiwan, tariffs, Ukraine, or U.S. restrictions on Nvidia chip exports, China could delay or withhold licensing approvals, turning TikTok into a potent diplomatic bargaining chip.
The technical and organizational challenges ahead are daunting. The new American joint venture must quickly decide on its structure, overcome sizable technical hurdles, and reassure a skeptical Congress that the deal truly satisfies the spirit—and the letter—of the law passed in 2024, which aimed to eliminate Chinese influence over TikTok’s U.S. operations. Data privacy and cybersecurity attorney Lily Li, founder of Metaverse Law, pointed out to Yahoo Finance that "a first step here would be ironclad corporate controls," emphasizing that the company’s ability to offer oversight and security may depend on how independently it can act from ByteDance.
One of the biggest sticking points is the licensing arrangement itself. ByteDance will continue to operate TikTok outside the U.S., with both the American and global versions apparently sharing the same underlying algorithm and video library. Li suggested that a perpetual license would be necessary to prevent ByteDance from clawing back its technology at any time. However, the White House has yet to provide a detailed summary of the new corporate structure or the precise terms of the license.
Meanwhile, the technical plan is for the U.S. entity to receive a copy of the algorithm, retrain it, and relaunch it—all without requiring American users to download a new app. Press secretary Karoline Leavitt assured that U.S. users would continue to have access to videos made around the world, even those hosted on ByteDance-controlled servers. But this seamless transition is easier said than done, especially given that Oracle’s role is limited to inspection and oversight rather than hands-on engineering.
There’s also the thorny issue of political buy-in. Congress, which passed the law forcing TikTok’s divestment, remains divided on whether the new arrangement meets its requirements. Michigan Republican Congressman John Moolenaar, a vocal critic, stated, "The law is clear: any deal must eliminate Chinese influence and control over the app to safeguard our interests." He reiterated his concerns this week, warning that the current arrangement "could allow continued [Chinese] control or influence." Whether Congress will take further action remains to be seen, but as Sobolik observed, "it’s now or never at this point." The clock is ticking for lawmakers to weigh in before the deal becomes irreversible.
For all the fanfare, some analysts argue that the deal may simply swap one form of dependence for another. ByteDance may no longer oversee daily content recommendations for American users, and the immediate fear of Chinese access to U.S. data might subside. But the U.S. TikTok will remain technologically dependent on China, which holds the keys to the algorithm’s future updates and improvements. As Project Syndicate put it, "the deal risks entrenching" China’s influence in subtler, but perhaps more enduring, ways.
Yet, not everyone sees this as a disaster. Some suggest that a less competitive, less addictive TikTok might actually benefit American teenagers—whether they realize it or not. If the U.S. version of TikTok lags behind its international counterpart, it could reduce the app’s grip on young users’ attention spans, offering an unexpected silver lining to the whole saga.
As the dust settles, one thing is clear: the fate of America’s most viral social media app is far from decided. The new framework promises American control and security, but leaves the door open for ongoing Chinese influence—both technical and political. Whether this delicate balancing act can hold remains to be seen, but for now, TikTok’s future hangs in the balance, a pawn in the broader chess game of U.S.-China relations.
