AsianFin -- The White House on Monday revealed more details of the deal aimed at save TikTok for the shore video application’s 170 million U.S. users.
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The new joint venture controlling TikTok’s U.S. business would lease its duplicate copy of algorithm from its Chinese parent ByteDance, and U.S. tech giant Oracle Corporation will then verify the retraining of the algorithm and protect U.S. user stat, a senior White House official told American news website Axios on Monday.
Such arrangement would not force U.S. users to re-download TikTok, which would continue to work with the app outside the country. But some lawmakers may oppose the lease for a 2024 law requiring the app be sold to Americans or be banned in the United States prohibits “cooperation with respect to the operation of a content recommendation algorithm.”
Other media outlets echoed Axios the same day. Oracle would provide security and help oversee the re-creation of a new U.S. version of TikTok's algorithm under a deal to sell the app to a consortium of American investors, Bloomberg learned from a White House official the same day. Partnering with the U.S. government, Oracle was reported to be in charge of algorithm retraining, application development and source code review.
The TikTok U.S. entity would reportedly lease a copy of the algorithm from ByteDance that would then be retrained "from the ground up" with Oracle's oversight, and data from U.S. users would be stored in a secure cloud managed by Oracle. ByteDance would not have access to information on TikTok’s US subscribers, nor would it have any control over the algorithm in the U.S., per the report.
Oracle would receive a copy of the algorithm from ByteDance and oversee TikTok’s security operations, Associated Press (AP) reported, citing a senior White House official. The algorithm would be “fully inspected” and monitored for any abnormal behavior, the official said.The official stressed that the content recommendation formula would be retrained using U.S. data in order to make sure the system is “behaving appropriately.”
U.S. President Donald Trump will sign an executive order later this week to essentially declare the terms of the TikTok deal meeting American's national security needs, the White House official reportedly said. The official also said China is expected to sign and approve a framework deal for TikTok’s divestment by the end of the week.
An investor consortium including Oracle, Silver Lake, a private equity firm, and venture capital firm Andreessen Horowitz will form a new U.S. entity to control TikTok’s business in the country under a framework that Washington and Beijing are finalizing, the Wall Street Journal last Tuesday.
A TikTok deal could be signed "in the coming days", and the United States will have control over TikTok’s algorithm in the acquisition of TikTok’s U.S. operation, White House press secretary Karoline Leavitt said on Saturday. She said the data and privacy of the app will be led by Oracle.
The deal, if completed, would transfer control of the TikTok’s U.S. operations to a new joint venture based in the U.S., and the ownership will have majority American investors and run by a majority American board of directors, a senior White House official confirmed on Monday, per CNN.
ByteDance will reportedly retain a less than 20% stake in new TikTok U.S. entity under the proposed deal, and other investors would include Oracle, Silver Lake, along with existing ByteDance investors and a number of new investors. While Trump said on Sunday said tech and media leaders Michael Dell and Lachlan and Rupert Murdoch may also be part of the new ownership group, CNN learned that Fox Corp. would be one of the investors, not the Murdochs individually. The full investor group has not yet been finalized,the aforementioned official said.
