The next big deadline for TikTok to instigate a change of ownership or face a ban in the US is now less than three weeks away and, according to Politico, American technology company Oracle is currently the favourite to complete a deal that keeps the short form video app operational within the country.
US President Donald Trump remains confident a deal can be done, and his Vice President JD Vance is reportedly so involved in the negotiations that insiders are claiming that he and his team are basically performing the role of an investment bank in the deal making.
That said, there remains uncertainty for those creators and musicians that rely on TikTok as a crucial fan engagement platform.
Some Republicans in Congress are already questioning whether the deals being negotiated in the White House truly address the data security concerns that prompted the 2024 law that said TikTok would be banned if it continued to be owned by China-based ByteDance. Plus the Chinese government will have to sign off on any deal and it’s still not clear that approval is assured.
It’s not surprising that Oracle is a favourite to do a deal that puts the US operations of TikTok into the hands of an American company.
While Trump has now positioned himself as the saviour of TikTok - having paused the Congress-instigated ban as soon as he returned to the White House in January - during his first presidency he tried to ban the app himself. And for the same reason as the Congress ban, fears that the Chinese government has access to US TikTok user-data via ByteDance.
Trump’s TikTok ban was delayed in the courts and then cancelled when Joe Biden became President. But while that ban was looking like it might happen in 2020, talks began about a joint venture involving Oracle. Under that arrangement, TikTok in the US would continue to be powered by ByteDance’s platform and algorithm, but the US business and US user-data would be managed by Oracle.
After Congress passed its sell-or-be-banned law last year, ByteDance insisted that completely splitting off TikTok US from TikTok in the rest of the world wouldn’t work, because the whole platform needs to share content and the all important algorithm. It also indicated that it would rather shut down its US business than sell the algorithm that powers TikTok.
It’s not really clear what kind of deals are being considered as part of the Vance-led negotiations. There has been talk of a transaction involving a sale of the TikTok algorithm within the US, with analysts telling Reuters that that would likely double the price tag. So a deal without the algorithm could be worth up to $50 billion, whereas with the algorithm a deal could top $100 billion.
Some reports suggest that the favoured Oracle deal is more of a compromise arrangement like the one considered in 2020.
But, says Politico, congressional Republicans and other China critics within US political circles are saying that, if any deal “keeps TikTok’s underlying technology in Chinese hands”, it would be “only a surface-level fix to the security concerns that led to last year’s sweeping bipartisan ban of the app”.
One of Politico’s sources says that the current Oracle deal “would essentially require the US government to depend on Oracle to oversee the data of American users and ensure the Chinese government doesn’t have a backdoor to it”. But, the source added, that’s not something Oracle would be in a position to fully guarantee.
Whatever deal is agreed, the Chinese government would have to sign off on it, and it’s not entirely clear what position it is likely to take, that decision possibly being connected to Trump’s wider trade war.
Reuters also notes that, while Vance is taking a very close interest in the TikTok sale talks, as are various American companies and billionaires, ByteDance itself is being a little more passive. It quotes Frank McCourt, involved in another bid for TikTok, as saying ByteDance is “lightly engaging in talks, but not to the degree one would expect from a motivated seller”.
Nevertheless, Reuters reports, Vance has told the various parties involved in the talks that he expects the general terms of a deal to be agreed by the current 5 Apr deadline. That would give Trump a good excuse to further delay Congress’s ban while any transaction is completed.