In a landmark development averting a nationwide ban, the United States and China have reached a framework agreement that will allow the popular video-sharing app TikTok to continue its operations for roughly 170 million American users.[1][2] The deal, announced following high-level trade talks in Madrid, positions US technology giant Oracle as a crucial partner in a new corporate structure designed to mitigate American national security concerns.[3][4] This resolution follows a years-long saga of political wrangling over the app's Chinese parent company, ByteDance, and the potential for the Chinese government to access sensitive user data or influence content.[4][1] The commercial terms of the complex arrangement have reportedly been agreed upon by the private parties involved, with a final conversation between US President Donald Trump and Chinese leader Xi Jinping expected to formalize the pact.[5][6]

The core of the agreement involves the creation of a new, US-headquartered company called TikTok Global, which will be responsible for providing all TikTok services to users in the United States and most of the world.[7] Under the proposed framework, Oracle will serve as the "trusted technology provider," a role that extends beyond simple cloud hosting.[8] All US user data will be migrated to and stored on Oracle's secure cloud infrastructure, a move intended to wall it off from any potential access by Chinese authorities.[9][7] This initiative, known as "Project Texas," has been in development for some time and is seen as the central pillar of the effort to address data privacy fears.[10][11] Oracle will also be tasked with continuously reviewing TikTok's source code and algorithms to ensure there are no backdoors or mechanisms for manipulation by its Chinese parent company.[9][12] While ByteDance is expected to retain a majority 80% stake in the new entity initially, Oracle and retailer Walmart are set to acquire a combined 20% stake.[13][14] There remains some ambiguity, however, with US officials suggesting that ownership by American investors will grow over time, potentially reaching a majority when factoring in the existing American stakes in ByteDance itself.[7][15][16]

A critical point of contention that remains central to the deal's evaluation is the fate of TikTok's powerful and famously effective recommendation algorithm.[3][2] US lawmakers and security experts have long worried that the algorithm, which determines the content users see, could be manipulated by Beijing for propaganda or censorship purposes.[3][17] The current framework reportedly does not involve a full transfer or sale of this core intellectual property from ByteDance.[10][18] Instead, China has indicated a reluctance to export the technology, which it considers strategically sensitive.[2] The compromise appears to be that Oracle will have the ability to inspect and vet the source code to ensure its integrity.[10][13] Whether this level of oversight, short of a full sale, will be sufficient to satisfy the concerns that animated the "divest-or-ban" law passed by Congress remains a significant hurdle.[10] The law explicitly forbids an operational relationship with ByteDance related to the algorithm, though it grants the president some authority to approve a deal if he determines the app is no longer under Chinese control.[12]

The path to this agreement has been a turbulent one, stretching back to the first Trump administration's threats to ban the app in 2020.[4][11] Those early efforts, which included a failed acquisition attempt by Microsoft, were stalled by legal challenges.[4][19] Bipartisan national security concerns persisted, culminating in the passage of the Protecting Americans from Foreign Adversary Controlled Applications Act in April 2024, which gave ByteDance a deadline to sell its US operations or face a ban.[20][4][21] After taking office, President Trump, who had changed his stance on the app, issued a series of executive orders to delay the law's enforcement, arguing a negotiated solution would better protect US interests while preserving the platform for its vast user base.[3][1][22] The announcement of a framework agreement comes just days before the most recent deadline was set to expire, signaling a potential conclusion to a defining test of US-China tech relations.[21]

Ultimately, this landmark deal represents a novel attempt to resolve the conflict between global technology platforms and national sovereignty. If finalized, it will create a new precedent for how Western governments handle the operations of popular, algorithm-driven applications owned by foreign adversaries. The success of the TikTok Global model will hinge on the rigorous execution of its security provisions and the ultimate resolution of control over its influential algorithm. The final approval from both national leaders will be watched closely by the technology and artificial intelligence industries, as the outcome will have far-reaching implications for data governance, cross-border investment, and the very structure of the global internet.[23]