US Considers Leasing TikTok Algorithm in New Divestiture Deal

The ongoing standoff over TikTok’s future in the United States appears closer to resolution, with reports suggesting that a new agreement will allow the platform to continue operating by leasing its algorithm from its Chinese parent company, ByteDance.

This development comes just after U.S. Treasury Secretary Scott Bessent confirmed that a framework for a sell-off had been reached. Under the plan, TikTok’s U.S. operations would be sold to an American-led consortium, but ByteDance would retain a 19.9% stake. The consortium, expected to operate under the name “TikTok America,” will reportedly include Oracle, Blackrock, and Andreessen Horowitz among its investors.

A central sticking point in negotiations has been TikTok’s recommendation algorithm, widely regarded as the driving force behind its global success. China has repeatedly stated it will not sell the technology, citing national security concerns. The proposed compromise – allowing U.S. operators to lease the algorithm while ByteDance maintains ownership – would preserve the user experience for American audiences while technically meeting divestiture requirements.

Oracle’s involvement is notable given its existing role in TikTok’s U.S. data management efforts. The company has previously been positioned as a trusted partner to ensure American user data remains separate from overseas systems. Still, questions remain about how much oversight U.S. regulators will have over an algorithm that remains under Chinese ownership.