President Trump approves deal handing Oracle control of TikTok’s U.S. algorithm

Oracle is now taking full control of TikTok’s U.S. algorithm under a national security deal signed off by President Donald Trump, according to a statement from the White House.

The agreement gives Larry Ellison’s company the job of rebuilding the app’s recommendation software inside the United States, cutting off Chinese access and fulfilling a legal requirement that ByteDance, TikTok’s Chinese owner, fully divest its U.S. operations.

Oracle will retrain the algorithm “from the ground up” using a leased version from ByteDance, and store all American user data in its own secure cloud systems.

ByteDance will no longer be allowed to access TikTok’s algorithm, U.S. user data, or any software operations inside the country. “Oracle, the U.S. security partner, will operate, retrain, and continuously monitor the U.S. algorithm to ensure content is free from improper manipulation or surveillance,” read the official Q&A released by the White House on Monday.

The move follows bipartisan concerns in Congress over the app’s national security risks, and aims to prevent any foreign government, including China, from influencing the content Americans see on the platform.

Oracle takes over algorithm, code, data, and surveillance systems

The deal hands Oracle control over retraining the algorithm, reviewing TikTok’s source code, and managing all future application development within the United States.

The White House did not explain how much oversight federal agencies would have over Oracle’s operations or the algorithm itself. However, the official stated that Oracle would also be responsible for ensuring “improper manipulation is prevented” without detailing how that would work.

The U.S. law forcing ByteDance to divest from TikTok strictly prohibits it from being involved in any U.S. version of the app, including its technology.

Chinese law, on the other hand, bans companies from exporting what it considers sensitive software. The workaround being attempted here, leasing the algorithm and recreating it in Oracle’s environment, may or may not satisfy lawmakers who supported the ban.

John Moolenaar, the Republican chair of the House Select Committee on China, raised concerns after the structure of the deal emerged, warning that it “may involve ongoing reliance by the new TikTok on a ByteDance algorithm and application that could allow continued” influence by the Chinese Communist Party.

While Oracle will have full responsibility for the U.S. version, the risk of backend entanglement is not completely off the table.

President Trump, who returned to the White House after the 2024 elections, plans to sign an executive order this week to finalize his approval of the deal.

Speaking on Friday, Trump said, “I had a great call with President Xi and as you know, and approved the TikTok deal, and we’re in the process.” That conversation happened just hours before the public announcement.

Trump said he expects the deal to close soon, and also confirmed that he would extend the deadline for ByteDance’s divestment by another 120 days. That’s in addition to the 90-day extension he signed last week, pushing the compliance deadline to mid-December.

New U.S.-based TikTok venture has Oracle, private equity, and tight restrictions

The new TikTok entity will be controlled by American investors, though the White House has not named them publicly. ByteDance’s ownership will fall under 20%, to meet the legal requirement that it relinquish control.

The board of directors will include seven members, with six of them being American. ByteDance will have one seat on the board but will be completely locked out of the company’s security committee.

Oracle isn’t just a vendor in this deal, it’s also an investor. Alongside Andreessen Horowitz and Silver Lake Management, Oracle is part of the consortium that will own the new TikTok venture.

The deal builds on Oracle’s ongoing multibillion-dollar partnership with the app, known as Project Texas, which already includes cloud hosting for U.S. and international user data. Now, that partnership expands to cover algorithm security, user surveillance protections, and development infrastructure.

The full takeover by Oracle and the tight data controls are aimed at easing concerns raised by lawmakers who pushed for a ban. They’ve warned repeatedly that China could pressure ByteDance to share user data or use TikTok to spread political narratives. ByteDance and Chinese officials have denied that claim.

In a statement Friday, China’s Ministry of Foreign Affairs said, “The Chinese government respects the wishes of the company in question, and would be happy to see productive commercial negotiations in keeping with market rules lead to a solution that complies with China’s laws and regulations and takes into account the interests of both sides.”

Trump also mentioned a potential “fee plus” for allowing the deal to happen.

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