The pressure for control of TikTok in the United States is reaching a critical point, with negotiations involving major players in the tech industry. Former President Donald Trump is in talks with Oracle and influential investment firms Andreessen Horowitz and Silver Lake Management to carry out the acquisition of TikTok USA.
Progress in the Deal Negotiation
According to Bloomberg, citing sources close to the process, negotiations between the United States and China are focused on the final agreement to separate the U.S. assets of the popular video app, TikTok. A consortium of investors, including Oracle, Andreessen Horowitz, and Silver Lake, could be tasked with acquiring these assets, which would be discussed in a meeting between Trump and Chinese President Xi Jinping scheduled for this week.
Trump stated on Monday that an agreement had been reached for TikTok to continue operating in U.S. territory, highlighting that discussions with Chinese authorities were progressing positively. In line with this, U.S. Treasury Secretary Scott Bessent has confirmed that there is a preliminary agreement aimed at separating TikTok USA from its parent company, ByteDance.
Details of the Proposed Agreement
The strategy involves the creation of a U.S. version of TikTok, which would include participation from Oracle, Andreessen Horowitz, and Silver Lake in the new entity. According to the terms of the agreement, ByteDance's stake in TikTok is expected to drop below 20%, a necessary move to comply with a U.S. national security law passed in 2024. This legislation required the Chinese company to divest from the platform or face a ban on its use in the United States.
If this agreement materializes with the approval of Trump and Xi, it would allow the video-sharing platform to continue operating in the U.S. and help ease tensions in bilateral relations between the two nations.
Impact on Oracle's Stocks
As negotiations unfold, Oracle's shares saw an increase of 1.5% on Tuesday, at times reaching nearly a 6% rise. Over the past month, the company's stock has surged by 24%, driven by new growth projections linked to the expansion of services and artificial intelligence (AI) infrastructure. This growth has positioned Oracle's CEO, Larry Ellison, in the race to be the richest man in the world, directly competing with Elon Musk.
Under the framework of the agreement under discussion, Oracle will continue to provide cloud computing services to TikTok in the U.S. In fact, Oracle is already working with TikTok to store user data in the United States and other countries through a multi-million dollar collaboration known as Project Texas.
Use of ByteDance's Algorithm
It is important to highlight that, despite the separation, TikTok in the United States would continue to use ByteDance's algorithm. Wang Jingtao, deputy director of the Chinese cybersecurity regulator, commented that the agreement would include "a license for the algorithm and other intellectual property rights." This implies that, although TikTok would be under U.S. control, its ability to operate effectively could depend on access to its strict algorithms.
The current situation of TikTok and its eventual restructuring in the U.S. could mark a significant milestone in the landscape of social media applications and in economic relations between the United States and China. The integration of major investment funds and tech partners indicates a wave of changes in the ownership and operation of the platform, creating both opportunities and challenges as the agreement progresses.
In a context where the influence of social media applications and national security concerns are increasingly relevant, the coming days will be crucial for the future of TikTok in the United States and, by extension, for the power dynamics between these two major powers.
For more news and analysis on the impact of these negotiations and other relevant topics, readers are invited to continue exploring the blog.
