TikTok algorithm to be ‘retrained’ by Oracle in Trump deal
Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
Oracle will recreate and provide security for a US version of TikTok’s algorithm, as part of a deal orchestrated by President Donald Trump to force a divestiture of the American arm of the Chinese-owned viral video app.
White House officials said on Monday the arrangement would ensure that US buyers would retain control of the app’s recommendation software after its TikTok US operations are spun off by its Chinese owner ByteDance.
These new American owners would lease a copy of the algorithm from ByteDance that would then be rebuilt by Oracle. Further technical details on how this would be achieved have not been announced.
“Oracle will operate in partnership with the U.S. government to ensure safety and data security across the entire TikTok platform — from source code review, to algorithm retraining, to application development and deployment,” said a White House official.
The comments jar with Beijing’s recent claims that the algorithm will remain in Chinese hands.
Officials last week said a US spin-off of TikTok would use ByteDance’s Chinese algorithm, and that the US and China had agreed on a framework that included “licensing the algorithm and other intellectual property rights”.
Underpinning any deal is an agreement that data for TikTok’s roughly 170mn US users will be stored on Oracle’s servers, which already holds this information as part of an earlier deal.
ByteDance will not have access to information on TikTok’s US users and will also lose control over the app’s algorithm, according to White House officials.
The new details come amid a thawing in the relationship between Trump and China’s President Xi Jinping after the US President’s “liberation day” trade war.
Trump on Friday said he and Xi had approved a deal that would enable TikTok to continue operating in the US. It came after Congress last year passed a law mandating a forced divestiture by ByteDance. Lawmakers threatened a nationwide ban if a deal could not be approved.
Trump has repeatedly extended a congressional deadline for a divestiture by ByteDance, most recently delaying a nationwide ban on the app for the fourth time until December 16.
TikTok had been developing a standalone US app in anticipation of a deal to ensure that content generated by American users would still be available in other countries, according to a person familiar with the matter.
Under the terms of a deal pre-existing US investors, including General Atlantic and Susquehanna, are expected to retain a stake in the business. They will be joined by a consortium of new investors.
Media mogul Rupert Murdoch is expected to invest in TikTok through his media group Fox Corp, the owner of right-wing cable channel Fox News, according to multiple people familiar with the matter. Personal computer pioneer Michael Dell is also expected to invest.
Trump, in an interview with Fox News on Sunday, confirmed that Larry Ellison, co-founder of Oracle, will be part of the investor group that will raise a “tremendous amount of money” alongside other prominent individuals.
The US consortium will own 80 per cent of the business, while ByteDance’s stake is expected to dip below 20 per cent as set out by Congress.
White House spokesperson Karoline Leavitt said on Sunday a deal to have TikTok’s US operations majority owned and controlled by American investors would be reached this week.
The White House negotiated for an independent TikTok board to be created, on which six of seven seats would be held by Americans, with ByteDance selecting the remaining director, Leavitt told Fox News.
