TikTok saved by Oracle? US-China deal: A comprehensive overview

### Relief for 170 million users: What's really behind the new TikTok deal ### TikTok's core remains: How the Chinese algorithm is to be made secure in the USA ###

More than just an app: What the TikTok deal reveals about the new power dynamic between the US and China

In a months-long struggle that gripped the digital world, the US and China have achieved a crucial breakthrough: A comprehensive framework deal is set to avert the threatened ban of the popular video app TikTok in the United States. The agreement marks the provisional climax of a geopolitical thriller characterized by national security concerns, the protection of 170 million American users' data, and a remarkable about-face by US President Donald Trump.

Instead of a forced sale, an innovative partnership solution is now emerging, which is based on the US technology company Oracle as a trusted partner. Oracle will not only manage the data of US users, but also monitor the valuable and highly controversial recommendation algorithm of TikTok's parent company, ByteDance.

This compromise skillfully navigates between American security requirements and China's desire to maintain its technological sovereignty. The agreement is more than just saving a social media app; it sets a potential precedent for the future of global technology platforms and could have a lasting impact on the strained trade relations between the two superpowers.

What were the underlying reasons for the dispute surrounding TikTok?

The conflict over TikTok between the US and China has developed over several years into one of the most significant digital policy disputes. TikTok belongs to ByteDance, a Chinese technology company that operates the popular short-video app. The US government's concerns focus on two main aspects: the potential access of the Chinese government to user data of American citizens and the potential for political influence via the platform.

The concerns of US authorities are not unfounded. Chinese law requires companies to hand over data to the government when necessary. This creates a structural risk that goes beyond the usual privacy concerns associated with social media platforms. Additionally, TikTok's algorithm, which determines what content users see, is causing headaches for American lawmakers. They fear it could be used to manipulate public opinion.

The problem gained urgency as TikTok grew exponentially in the US. With 170 million monthly active users in the United States, the platform has become a central communication medium, especially for young people. A third of young Americans get their news via TikTok, highlighting the potential reach of possible influence.

What legal basis did the US create for a TikTok ban?

The legal framework for a potential TikTok ban was established during Joe Biden's presidency. In April 2024, Biden signed the "Protecting Americans from Foreign Adversary Controlled Applications Act." This legislation was part of a broader foreign aid package for Israel and Ukraine and was passed by both the House of Representatives and the Senate with broad bipartisan support.

The law requires ByteDance to sell its stake in TikTok within 270 days, otherwise the platform faces a complete ban in the US. Specifically, this means TikTok would have to be removed from the Apple and Google app stores and could no longer use hosting services. Without technical updates, the app would gradually become unusable for existing users.

The original deadline for the sale was January 19, 2025. However, the law included a provision for an extension: the president could extend the deadline by another 90 days if substantial progress toward a sale was evident. In January 2025, the US Supreme Court upheld the constitutionality of this law and unanimously dismissed TikTok's lawsuit.

How did Trump's position on TikTok evolve?

Donald Trump's stance on TikTok underwent a remarkable transformation. During his first term from 2017 to 2021, Trump attempted to force TikTok to sell by imposing a ban, but failed in court. At the time, he viewed the app as a threat to national security and tried to halt its operations in the US.

When Trump was re-elected president in 2025, his perspective had fundamentally changed. He recognized that TikTok had significantly helped him in the 2024 election campaign, particularly in mobilizing young voters. His personal TikTok account gained 15 million followers, underscoring the platform's political importance. This experience led to a strategic shift: instead of banning the app, Trump wanted to "save" it for young Americans.

Since taking office, Trump has extended the sales deadline three times. At the same time, his administration even opened an official TikTok account, symbolically underscoring the changed stance. Trump has repeatedly emphasized that banning the app could alienate his young supporters, which would be politically counterproductive.

What are the details of the current framework deal?

On September 15, 2025, both sides announced a breakthrough in negotiations. US Treasury Secretary Scott Bessent declared after trade talks in Madrid: “We have a framework for a TikTok deal.” President Trump hinted at an agreement on his platform Truth Social, without mentioning TikTok by name. He wrote of a “certain” company that young people “were desperate to save.”.

The Chinese side also confirmed the agreement. Li Chenggang, China's trade representative, spoke of a "fundamental framework consensus for the appropriate resolution of TikTok-related issues." Wang Jingtao, deputy director of the Chinese Cyberspace Administration, indicated that the agreement could include the licensing of the algorithm and other intellectual property rights.

A key point of the agreement is that TikTok's US version may continue to use ByteDance's algorithm. This was previously a critical point of contention, as China had classified the export of its recommendation algorithms as a strategic technology. The deal stipulates that an American partner – likely Oracle – will handle data management and security monitoring, while ByteDance will retain certain ownership rights.

What role does Oracle play in the negotiations?

Oracle, the American technology company led by Larry Ellison, is considered the most likely American buyer or partner for TikTok. Ellison, who at one time even surpassed Elon Musk as the world's richest person, maintains close ties to the Trump administration and is a regular visitor to Mar-a-Lago.

The relationship between Oracle and TikTok dates back several years. Since 2022, TikTok has been storing American user data on Oracle servers as part of “Project Texas.” This $1.5 billion restructuring program was intended to gain the trust of the American government and users by moving all US user data to American servers.

Project Texas created an American subsidiary called “US Data Security” (USDS), which is managed by American employees. Oracle not only handled data storage but also monitored and audited TikTok's source code. The company acts as a trusted technology partner, intended to ensure that Chinese authorities do not gain access to American user data.

Why was a breakthrough achieved in the negotiations now?

The timing of the breakthrough is no coincidence. Treasury Secretary Bessent explained that the threat of actually banning TikTok had persuaded the Chinese negotiators to back down. Trump had made it clear that he would have been prepared to actually block TikTok and that national security would not be sacrificed for a deal.

The negotiations took place in Madrid within the context of broader trade talks between the US and China. Both countries had an interest in de-escalating their escalating trade disputes. Parallel to the TikTok talks, China announced that the American chipmaker Nvidia had violated Chinese antitrust laws, a move seen as retaliation for American technology restrictions.

Another factor was the political reality in the US. With 170 million American users, TikTok had become too large to simply ban without risking massive political backlash. Young voters, a key demographic for both parties, used the platform extensively. A ban would have alienated this electorate and was therefore politically difficult to implement.

What technical and security policy aspects does the deal encompass?

The agreed-upon framework addresses key US security concerns without destroying TikTok's core functionality. A critical point is the handling of TikTok's recommendation algorithm, considered ByteDance's most valuable asset. Previous negotiations often failed because China refused to transfer this technology, as it fell under Chinese export restrictions.

The new agreement appears to have found an innovative compromise: TikTok can continue to use the Chinese algorithm, but under strict American oversight. Oracle will act as trustee and monitor both the data and the algorithm's operations. This means that American authorities will have insight into how the system works without China having to completely relinquish its intellectual property.

The deal builds on the experience of Project Texas, which had already proven that partial separation is technically feasible. Since 2022, 100 percent of American user traffic has been routed through Oracle-controlled infrastructure. The user algorithms for American users already run in Oracle's cloud infrastructure, providing the technical foundation for the expanded solution.

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What are the economic dimensions of the TikTok acquisition?

The financial aspects of the TikTok deal are substantial. TikTok generated approximately $10 billion in revenue in the US in 2024, with an estimated global revenue of between $20 and $26 billion. The American market is the most profitable, as social media platforms in the US generate significantly higher advertising revenue per user than in other regions.

ByteDance itself is valued at around $300 billion, making it the second most valuable private technology company in the world. A significant portion of this valuation depends on its performance in the US, where TikTok has its most valuable user base. Losing the American market would have severely impacted ByteDance, increasing the pressure on the Chinese side to negotiate a deal.

For Oracle, the deal represents a significant business opportunity. The company's shares rose by over three percent after the agreement was announced. Oracle not only benefits from cloud hosting fees but also positions itself as a leading provider of data-sensitive national security applications. The partnership with TikTok demonstrates Oracle's capabilities in addressing complex geopolitical requirements.

How do different interest groups react to the deal?

Reactions to the announced deal are mixed and reflect the complex interests at play. Young TikTok users, who had feared a potential ban, largely reacted with relief. Their emotional farewell videos and protests in early 2025, when TikTok was briefly suspended, had increased political pressure on the government.

Security experts and members of Congress remain skeptical. They doubt whether a solution that still grants ByteDance a role can alleviate the fundamental security concerns. Critics argue that as long as Chinese companies have influence over the algorithm, the risk of covert interference remains.

The technology sector is watching the deal with great interest, as it could set a precedent for how foreign tech investments are handled. Other Chinese technology companies hope that a successful TikTok solution will open new opportunities for them in the US. At the same time, American technology companies fear that the deal could give Chinese competitors an unfair advantage.

What legal hurdles still exist?

Despite the announced agreement between the governments, significant legal hurdles remain. Congress, which passed the original ban bill by a large majority, may still have to approve the final agreement. Some Democratic lawmakers have already announced they will scrutinize any deal to ensure it meets legal requirements.

The problem lies in the interpretation of the “Protecting Americans from Foreign Adversary Controlled Applications Act.” The law requires a complete divestiture of ByteDance, which is difficult to reconcile with a solution that retains ownership rights for the Chinese company. Legal experts are debating whether the proposed structure meets the legal requirements.

Trump has already extended the sales deadline three times, but the legal basis for further extensions is disputed. So far, there have been no legal challenges to these extensions, but that could change if the final deal doesn't meet Congress's expectations. Attorney General Pam Bondi has assured companies like Apple and Google that the Justice Department will not pursue claims for potential legal violations, but this assurance could become invalid if the political climate shifts.

What does the deal mean for global technology policy?

The TikTok deal has implications far beyond bilateral relations between the US and China. It establishes a new model for dealing with cross-border technology platforms, one that other countries may well adopt. The solution demonstrates that even amidst deep geopolitical tensions, pragmatic compromises are possible that reconcile economic and security interests.

For the European Union, which has its own concerns regarding Chinese technology companies, the deal could serve as a blueprint. The EU is working on similar regulations for foreign technology investments and could use the American solution as a model for its own arrangements. In particular, Oracle's role as a trusted intermediary could be replicated in other jurisdictions.

The deal also impacts broader trade talks between the US and China. A successful resolution to the conflict in such a symbolically significant area as TikTok could benefit other aspects of bilateral relations. Treasury Secretary Bessent has already announced further rounds of negotiations in the coming weeks, suggesting a possible easing of trade tensions.

What technical challenges does the implementation entail?

The practical implementation of the TikTok deal entails considerable technical complexities. Separating algorithm operations and data flows between different legal systems requires sophisticated technical solutions. Oracle must ensure that American user data never reaches Chinese servers, while simultaneously guaranteeing the app's functionality.

A particular challenge lies in TikTok's global nature. American users regularly interact with content from users in other countries, necessitating cross-border data flows. The new architecture must enable these interactions without compromising security. This could mean developing different versions of the app for different markets.

Monitoring the algorithm presents another technical challenge. Oracle engineers must be able to understand and review TikTok's source code without compromising trade secrets. This requires new forms of technical collaboration between American and Chinese engineers under strict regulatory oversight.

How will this deal affect the future of social media?

The TikTok deal could be groundbreaking for the future of global social media platforms. It demonstrates that even amidst fundamental geopolitical tensions, solutions can be found that address both security concerns and user needs. This could establish a new paradigm for regulating cross-border technology platforms.

The deal sets important precedents for other social media companies. Chinese platforms like WeChat or other ByteDance products could seek similar arrangements with Western governments. At the same time, American and European technology companies in China could face similar requirements to entrust their operations to local partners.

The deal also highlights the growing importance of “data sovereignty”—the idea that countries should have control over their citizens’ data. These concepts will likely shape the future of international technology policy and could lead to the fragmentation of the global internet into regional blocs. TikTok will become a test case for whether such fragmentation can be avoided without sacrificing security interests.

What long-term effects can be expected?

The full long-term consequences of the TikTok deal will only become apparent over the next few years. If the solution proves successful, addressing security concerns while maintaining the platform's functionality, it could serve as a model for similar conflicts. This could lead to the development of new international standards for cross-border technology platforms.

For ByteDance, the deal represents a fundamental shift in its business model. The company must learn to operate in a more regulated and monitored environment. This could impact its ability to innovate rapidly, but it could also open up new business opportunities in other regulated markets. The experience gained from the American deal could help ByteDance overcome similar challenges in other countries.

The global technology industry is watching the TikTok deal as an indicator of the future direction of tech geopolitics. A successful deal could usher in a period of détente in technological relations between the US and China. However, if it fails or leads to persistent security concerns, it could further escalate technological tensions and encourage other countries to adopt even more restrictive measures against foreign technology companies.

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