A new U.S.-based joint venture with investors that include Oracle and the private equity firm Silverlake will take control of the popular short video app TikTok, in a proposed deal that a senior White House official said was a compromise that met both U.S. and Chinese law.
The official, who spoke to reporters on condition of anonymity, said the U.S. government would not take a stake or have a seat on the board.
The new venture will get a copy of TikTok's most valuable asset, its content recommendation algorithm, which will then be re-trained on U.S. data, the official said. The software company Oracle will serve as the company's "security provider," overseeing things like how the algorithm works, how the app is updated and how Americans' data is stored.
"All this is going to save TikTok for 170 million American users, make it safe and secure for them. It's going to save thousands of jobs. It's going to save thousands of small businesses that depend on the app to promote their businesses," the official said.
During an interview on The Sunday Briefing on FOX News Channel on Sunday, President Trump named Larry Ellison of Oracle, Michael Dell, founder of Dell Technologies, and Lachlan Murdoch, heir to Rupert Murdoch's media empire, as people who were also involved in the deal. The White House official declined to comment when asked about other investors.
Oracle, Dell, Silverlake, and News Corp. did not respond to NPR's emailed requests for comment. FOX declined to comment on the record.
As TikTok's popularity rose during the past few years, concerns about national security followed, with some analysts and lawmakers believing that there was a significant risk in the possibility that Beijing could pressure the app's Chinese owner ByteDance to help it spy on or influence TokTok's many American users.
Last year Congress passed a law that required ByteDance to divest, or see the app banned in the U.S. The Supreme Court upheld TikTok's free speech challenge to the ban. On Inauguration Day, Trump signed the first of several executive orders pausing enforcement of the ban.
According to the White House official, President Trump is expected to sign a new executive order this week "essentially declaring that the terms of this deal meet America's national security needs" and that it meets requirements laid out by law.
The official said the executive order would extend an enforcement pause on that law to allow the investors and the company to finalize the implementation documents. The closing of the deal will be 120 days from signing, the official said.
The official said the fate of the algorithm was a "tough point of negotiation."
"We had to come up with a compromise that meets both the requirements of U.S. law as well as the domestic law in China," the official said.
"It's going to be continuously monitored as it operates to ensure that it's behaving appropriately. Right. That it's not being used for any kind of malicious purpose and that it's not being unduly influenced," the official said.
The Trump administration has focused substantial energy on the tech industry, pushing companies like Apple and Nvidia to manufacture at home and trying to broker this deal to keep TikTok from going dark. The administration has also injected itself into the business of tech.
Earlier this summer, the U.S. government announced it would take roughly a 10% stake in chipmaker Intel as part of its efforts to promote chip manufacturing in the United States. The Trump administration also announced that it would take a 15% cut of Nvidia's H20 chip sales to China.
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