Trump Administration Considers TikTok Deal Allowing Chinese Algorithm Ownership

The Trump administration is reportedly weighing a deal to prevent a TikTok ban in the U.S. by allowing its Chinese owner, ByteDance, to retain control of the platform’s algorithm while leasing it to a U.S.-based entity. This proposal, aimed at addressing national security concerns without disrupting TikTok’s 170 million U.S. users, has drawn criticism from China hawks within the Republican Party¹. The White House has until April 5, 2025, to finalize a solution under the Protecting Americans from Foreign Adversary Controlled Applications Act, which mandates ByteDance’s divestment or faces a ban².

Proposed Deal Structure and Stakeholders

The deal under negotiation involves selling TikTok’s U.S. operations to investors like Oracle and Blackstone, while ByteDance maintains ownership of the algorithm¹. Oracle would manage U.S. user data under a “Project Texas 2.0” framework, a revised version of earlier data-localization efforts. Other bidders, including Frank McCourt’s consortium and Perplexity AI, have submitted offers ranging from $20 billion to $30 billion³. However, the plan faces opposition from lawmakers such as Rep. John Moolenaar (R-Mich.), who insists on full divestment².

Political and Legal Challenges

Trump’s suggestion to link TikTok’s sale to tariff relief for China has sparked bipartisan backlash. Sen. Ed Markey (D-Mass.) called the idea “ridiculous,” while Rep. Rich McCormick (R-Ga.) argued the two issues should remain separate⁴. Legal hurdles persist, as the DC Circuit Court and Supreme Court upheld the ban in 2024, though Trump extended the deadline via executive order in January 2025². China’s cooperation remains uncertain, with officials demanding “mutual respect” and compliance with Chinese laws⁴.

Implications for National Security

The primary U.S. concern is ByteDance’s potential to share user data with the Chinese government. A partial divestment allowing <20% Chinese ownership might satisfy the executive order but not congressional mandates². The deal’s success hinges on Beijing’s approval, which could complicate negotiations given China’s strict export controls on algorithms¹. Meanwhile, TikTok’s brief outage in January 2025 demonstrated the platform’s economic impact, triggering protests from influencers and small businesses⁵.

Conclusion

The proposed TikTok deal reflects a compromise between national security priorities and economic realities. While the algorithm-lease model offers a temporary solution, its long-term viability depends on political consensus and China’s willingness to cooperate. Stakeholders should monitor developments ahead of the April 5 deadline, which may yet be extended again⁵.