Donald Trump has announced that the United States and China have reached an agreement allowing TikTok to continue its operations in the US. This deal transfers the app's US operations from its Chinese parent company, ByteDance, to a consortium of American companies, including Oracle, Silver Lake, and Andreessen Horowitz.
ByteDance will lower its stake to below 20 percent to comply with the national security law requiring divestiture by August 2024. The enforcement date for this act has been extended to December 16.
Despite the ownership change, TikTok's recommendation algorithm remains a major concern. Chinese cybersecurity official Wang Jingtao stated that ByteDance would license the algorithm and other intellectual property rights to the United States operation.
This suggests ongoing Chinese involvement in TikTok’s algorithm. US officials insist that ByteDance should have no operational control after divestiture. The House Select Committee on China has warned that retaining Chinese algorithm control could violate the US divestiture requirements.
China described the framework deal as a ‘win-win’ solution and will review technology exports and intellectual property licensing under its own laws. The agreement may support broader economic discussions between the two countries as they maintain a tariff truce.
Investor optimism led Oracle shares to rise to almost 6 percent following the company's role in Project Texas. The deal structure resembles earlier negotiations that were delayed during past US-China tariff discussions.
The TikTok deal raises general concerns regarding national security and economic interests. The increased US ownership of the app’s operations also highlights the issues of influence and control associated with licensing the algorithm developed in China.
The latest developments surrounding TikTok highlight the delicate balance between innovation, security, and international relations. The December 16 deadline will be critical for finalizing the deal. The results of this agreement could establish a precedent for cross-border collaborations in technology and regulatory frameworks, benefiting users, investors, and policymakers alike.