The administration of U.S. President Donald Trump is reportedly formulating a strategy to preserve TikTok’s operations in the U.S. by involving Oracle (ORCL) and a consortium of investors to take over the management of the app’s global operations. According to NPR, this plan would see ByteDance, TikTok’s Chinese parent company, maintaining only a minority stake while Oracle would oversee critical aspects like the app’s algorithm, data collection, and software updates. Oracle, which already supports TikTok’s web infrastructure, would essentially become the steward of these key functions, aiming to address national security concerns about data misuse.
This potential arrangement comes in the wake of a law that required ByteDance to divest TikTok or face a ban in the U.S., a scenario that unfolded when TikTok was briefly taken offline on January 19. Trump’s executive order, signed shortly after his second term began, seeks to delay the enforcement of this law by 75 days, providing a window for negotiations.
Under the tentative deal, American investors would hold the majority stake in TikTok, though the specifics are still subject to change. The objective, as revealed by an anonymous source to NPR, is for Oracle to monitor and oversee TikTok’s operations, thereby reducing Chinese influence over the app.
Discussions about this deal have included other major players like Microsoft (MSFT), indicating broad interest from U.S. companies in securing a stake in what is seen as a lucrative and influential social media platform. The report also notes that these talks are ongoing, with meetings between Oracle representatives and White House officials having taken place, and more scheduled for the near future.
The financial scope of Oracle’s interest is significant, with reports suggesting their investment could be in the tens of billions. However, Trump has expressed a desire for a 50% U.S. ownership in any joint venture, indicating a push for substantial American control.
One of the critical challenges in finalizing this deal, as per NPR, is appeasing Congress, which has shown skepticism towards TikTok due to national security concerns. This skepticism was part of the reason why the previous administration under Joe Biden had passed legislation aiming at a potential ban or divestiture.
Moreover, the deal faces opposition from free speech advocates who argue against the TikTok ban, pointing out that TikTok’s data operations and content moderation are already managed within the U.S., with Oracle’s cloud servers handling data storage and decision-making processes for American users.
This intricate situation reflects the broader tension between national security, international business, and digital rights, as the U.S. navigates its relationship with technology firms linked to foreign entities. The outcome of these negotiations could set precedents for how the U.S. deals with similar cases in the future, balancing economic interests with security imperatives.
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