After months of contentious negotiations, President Donald Trump has signed an executive order approving the sale of TikTok’s U.S. operations to an American investor group, temporarily halting the enforcement of a national security law that would have required the platform’s divestiture or faced a complete ban.
The executive order pauses enforcement for 120 days to allow for the execution of a divestiture plan valued at approximately $14 billion, according to Vice President JD Vance.
The deal, which received approval from Chinese President Xi Jinping following discussions with President Trump, mandates significant changes to TikTok’s U.S. operations. Most significantly, Oracle Corporation will assume a pivotal role in supervising the platform’s security operations and providing cloud computing infrastructure to support U.S. operations.
Under the terms of the agreement, TikTok must transfer control of its recommendation algorithm for U.S. users to American ownership, addressing longstanding concerns about potential data misuse by foreign entities.
The executive order specifically targets TikTok’s source code and content moderation systems, which will now fall under the oversight of U.S.-based management and a newly established board of directors.
The national security law, originally signed by President Joe Biden, focused on preventing Chinese control over sensitive U.S. user data through TikTok’s recommendation algorithm. Oracle’s involvement aims to create a firewall between ByteDance, TikTok’s parent company, and U.S. data flows, effectively rewriting the platform’s algorithm for American users.
This arrangement reflects the complex geopolitical dynamics surrounding U.S.-China technology competition, establishing a potential precedent for other Chinese-owned tech companies operating in the United States.
The $14 billion valuation underscores TikTok’s significant market penetration and user base in America. Reports from CNBC indicate that Oracle, along with Silver Lake and MGX, will collectively hold a 45% stake in TikTok’s U.S. operations.
ByteDance has not publicly confirmed the transaction or commented on the executive order, leaving questions about the long-term implications of this deal.
The agreement aims to guarantee TikTok’s operational continuity in the U.S. market while addressing the high-stakes concerns associated with national security and data privacy that have dominated discussions about the platform’s future. Similar to how rights management organizations protect creative content, this deal establishes protective measures for American user data.
The restructuring also raises questions about how content creators will engage with audiences, as changes to the recommendation algorithm could significantly impact exposure patterns similar to how artists navigate different streaming platforms for maximum visibility.
