TikTok’s algorithm will be overseen by Oracle in the US after the sale is completed

By Clare Duffy, CNN

New York (CNN) — The White House has answered what had been one of the major outstanding questions regarding its pending deal to transfer TikTok’s US operations to a majority American ownership group: Under the agreement, the app’s algorithm will be operated in the United States and overseen by Oracle.

The detail was confirmed by a senior White House official in a call with reporters on Monday. If completed, the deal will transfer control of TikTok’s US operations, along with a copy of the algorithm, to a new joint venture based in the United States. That ownership group will have majority American investors and run by a majority American board of directors, the official said.

Oracle and private equity firm Silver Lake will be among those investors, along with US and global firms who are already invested in TikTok parent company ByteDance and a number of new investors. President Donald Trump said on Sunday that tech and media leaders Michael Dell and Lachlan and Rupert Murdoch may also be part of the new ownership group. A source familiar with the matter clarified to CNN that Fox Corp. would be one of the investors, not the Murdochs individually.

ByteDance will retain a less than 20% stake in TikTok US following the deal. The full investor group has not yet been finalized, the official said.

The new information comes as the White House pushes ahead to finalize the TikTok sale, after Trump said he made progress toward the deal in a call with Chinese President Xi Jinping on Friday. The deal is still awaiting some formal regulatory approvals from China, the White House official said Monday, although US leaders have expressed confidence that the agreement will be completed.

“We are 100% confident that a deal is done,” White House Press Secretary Karoline Leavitt said on Saturday, adding that it would likely be signed “in the coming days.”

Trump is set to sign an executive order later this week stating that the deal constitutes a qualified divestiture as required by the ban-or-sale law that passed last year, the official said. He will also extend the pause on enforcing the law by another 120 days so that paperwork and regulatory approvals for the deal can be completed. At the same time, the official said, ByteDance is expected to sign an agreement laying out the framework of the deal with one or more of the new investors.

Trump last week extended the ban until December 16, meaning the deal is likely to be formally completed early next year. That would conclude the yearslong effort to place TikTok under American control, over US officials’ concern that its China-based parent company posed a national security risk.

The fate of the algorithm had remained a major question, because the content recommendation engine plays a big role in the app’s popularity but is also behind the national security concerns. US officials worried that ByteDance could be forced to manipulate the algorithm on behalf of the Chinese government to influence or generate dissent among Americans. The TikTok ban-or-sale law prohibits “any cooperation with respect to the operation of a content recommendation algorithm” between ByteDance and a new potential American ownership group.

Under the deal, the new ownership group will receive a copy of the algorithm code from ByteDance, review it and retrain it on US user data. Oracle will continuously monitor how it’s pushing content to users, according to the senior White House official.

The new ownership group will control the algorithm only for US users — again raising the question about whether American users will have to download a new, separate app after the deal is complete.

The deal will expand Oracle’s involvement with TikTok, building on an existing partnership with ByteDance to store TikTok’s US user data domestically as part of an earlier effort to address national security concerns. Oracle Chairman Larry Ellison is also close with Trump.

In a surprise move on Monday, Oracle announced that its CEO Safra Catz will step down from her role, to be replaced by co-CEOs Clay Magouyrk, previously president of Oracle’s cloud infrastructure unit, and Mike Silica, previously president of Oracle Industries. Catz will become vice chair of Oracle’s board of directors. It’s not clear if the transition is related to the TikTok deal; however, the move could free up Catz, also a Trump ally, to take on a leadership role in the new joint venture.

The White House has not yet finalized whether it will take a fee for negotiating the TikTok deal, which is expected to be worth billions of dollars, according to the official. However, the White House will not have a “golden share” or other equity stake in the new company.

–This story has been updated with additional details and context.

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