• The US government will not take an equity stake in TikTok as part of a deal to restructure its US operations.
  • Oracle will act as the security gatekeeper for a US version of TikTok's algorithm, with US user data maintained in a secure Oracle cloud.
  • ByteDance will retain less than a 20% ownership stake, with US investors holding the majority and controlling six of seven board seats.

Restructuring for Security

A senior US official confirmed Wednesday that the government will not hold a direct equity stake in TikTok, a key detail in the ongoing negotiations to secure the popular app's future in the United States. Instead, the complex agreement hinges on creating a new, firewall-protected corporate structure and handing critical security oversight to Oracle Corp.

Under the proposed terms, Oracle will become the gatekeeper for a US-specific version of TikTok’s core algorithm, leasing it from Chinese parent company ByteDance. All data from American users will be housed in a secure cloud environment managed by Oracle, a setup designed to prevent access by ByteDance and alleviate longstanding national security concerns raised by US lawmakers and intelligence agencies.

Shifting Ownership and Control

The ownership of the newly structured TikTok entity is set for a significant overhaul. While ByteDance will maintain a minority stake of less than 20%, the majority of the ownership will shift to US-based investors. Governance will also be localized, with American citizens slated to hold six of the seven seats on the company’s board, according to people familiar with the matter.

This arrangement appears to be an attempt to strike a balance, allowing TikTok to continue its massive US operations while creating a legal structure that satisfies the Committee on Foreign Investment in the United States (CFIUS). The Biden administration has been pushing for a resolution that mitigates risks associated with Chinese ownership without resorting to an outright ban, a tool previously favored by some legislators.

A Precarious Path Forward

Despite the progress, the deal’s path to final approval remains uncertain. The structure has not yet received full endorsement from China’s foreign ministry, and it is unclear if it will completely satisfy key US lawmakers who have advocated for more severe measures. A spokesperson for ByteDance declined to comment, and Oracle did not immediately respond to a request for clarification on its specific technical role.

The negotiations are being closely watched as a potential template for how the US navigates national security concerns with other foreign-owned technology platforms. For now, the confirmation that the government will not be a direct shareholder clarifies one of the more contentious aspects of the potential agreement, moving the talks forward but leaving significant diplomatic and regulatory hurdles still to clear.