Trump administration considering TikTok deal with Oracle, Microsoft

The TikTok deal comes amid increasing scrutiny of the short video platform in the US, with fears that user data could be used by the Chinese government for espionage or other purposes

The Donald Trump administration is pushing forward with a major plan to restructure TikTok’s ownership, aiming to address national security concerns and safeguard its continued operation in the US. Central to this plan is the involvement of US-based investors, such as Oracle and possibly Microsoft, who are poised to take over TikTok’s operations in a bid to minimize the influence of its Chinese parent company, ByteDance.

This move follows Trump’s suggestion that notable American figures like Oracle’s Larry Ellison or Tesla’s Elon Musk could play a role in acquiring the social media giant, ensuring its future in the TikTok U.S. market.

Transferring control to US firms and enhancing oversight

Reports indicate that ByteDance will retain a minority stake in TikTok under the new arrangement, but Oracle is set to take on a more significant role. The US-based tech company will oversee crucial elements of the app’s operations, including its algorithm, data collection methods, and software updates. 

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The intention is for Oracle to exert oversight, ensuring that TikTok complies with US regulations and alleviates concerns about Chinese government access to user data. A majority stake in TikTok would be held by US investors, although the exact financial terms of the deal remain unclear.

The TikTok deal comes amid increasing scrutiny of the short video platform in the US, with fears that user data could be used by the Chinese government for espionage or other purposes. The Trump administration’s concerns have led to legislation mandating ByteDance reduce its stake in TikTok to continue operating in the country.

The deadline for this divestiture was initially set for January 19, but the Trump administration extended it by 75 days through an executive order to allow more time for negotiations. The proposed Oracle TikTok acquisition aims to mitigate TikTok data privacy concerns and ensure better security.

Financial and diplomatic hurdles continue

The $200 billion valuation that ByteDance is reportedly seeking for TikTok could prove to be a significant challenge for the prospective US investors, raising questions about the feasibility of such a large deal. The negotiations come amid a larger geopolitical struggle between the US and China over digital data and corporate control, with both countries asserting their interests in how foreign companies operate on their soil.

In addition, China has reiterated its stance that business decisions should be made independently by companies and should not be influenced by government policies, emphasizing the growing tension in US-China relations.

Despite the ongoing discussions and growing concerns, the proposed ownership shift represents a crucial turning point for TikTok. With the future of TikTok in the U.S. hanging in the balance, its outcome will depend on both the political dynamics and the financial realities that come with navigating international relations and data governance. If the deal moves forward, it may set a new precedent for foreign-owned apps operating in the US while still attempting to keep geopolitical tensions at bay.

Also Read: US Sets January 19 as TikTok's App Store Exit Date