TikTok’s long-running regulatory saga in the US has taken a decisive turn this week, with a tentative deal now on the table that could reshape the app’s future in one of its most profitable markets.
According to officials briefed on the matter, TikTok’s US operations would be spun into a new business owned largely by American investors, a move designed to satisfy national security concerns raised by Washington.
The framework, disclosed after high-level talks between US and Chinese officials in Madrid, sets the stage for President Donald Trump to discuss the proposal directly with Chinese President Xi Jinping later this week, a conversation that could determine whether the deal goes ahead.
The buyers behind the new TikTok America
The investor group circling TikTok is a powerful consortium.
Oracle Corp., venture capital powerhouse Andreessen Horowitz, and private equity firm Silver Lake Management have all lined up to take stakes in the new US entity.
While the precise ownership split remains unclear, ByteDance’s holding would be capped below 20%, in line with a 2024 national security law requiring foreign divestment.
In addition, existing American backers of ByteDance would end up with roughly 30% of the business, while outside investors, including Oracle and its partners, would control about 50%.
For Oracle, the deal cements its role as TikTok’s infrastructure backbone.
The Austin-based software giant already provides cloud hosting for the platform under “Project Texas,” a multibillion-dollar agreement that ensures American user data stays within the US.
This long-standing arrangement, along with Oracle’s strong lobbying ties in Washington, positioned it as a natural choice to anchor the latest deal.
Investors applauded the news, briefly pushing Oracle’s stock near a six percent gain on Tuesday, before it pared back.
With its shares already up more than 80% this year, Oracle’s cloud offering is emerging as its strongest growth driver, and the TikTok contract only strengthens that momentum.
Still, representatives for Oracle, Andreessen Horowitz, Silver Lake, and TikTok have kept silent on the fine print, reiterating that the deal is still under political review.
What’s next: algorithms, geopolitics and approval hurdles
The biggest unresolved question is TikTok’s recommendation engine, the highly prized algorithm that powers its addictive feed.
US officials have pressed for strict divestment under last year’s law signed by then-President Joe Biden, which blocks ByteDance from retaining any operational control, including over the software.
Chinese officials, however, insist ByteDance would license the algorithm to TikTok’s US spinout, a compromise that may not fully satisfy Washington.
The algorithm dispute underscores just how much is at stake: without it, TikTok risks losing its most valuable edge over rivals like Instagram Reels and YouTube Shorts.
Political dynamics loom even larger. The deal has become a bargaining chip in broader US-China relations, particularly on trade.
Earlier attempts at resolving TikTok’s ownership had collapsed when Beijing withheld approval following new US tariffs in April.
This time, Trump has staked personal credibility on securing an agreement, telling reporters Tuesday he had “a deal on TikTok” and planned to confirm details directly with Xi on Friday.
If both leaders give their blessing, TikTok could finally move past years of uncertainty and continue operating in the US market with new American ownership.
Failure, however, could reignite threats of a nationwide ban and sour the diplomatic thaw both countries have been carefully pursuing.
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