U.S. May Lease China’s Algorithm Instead of Owning It

With Washington confirming that it has established a framework for TikTok’s sell-off ahead of this week’s deadline, more details are now emerging on how the app will continue to function in the U.S. under the “Protecting Americans from Foreign Adversary Controlled Applications Act.”
On Tuesday, Treasury Secretary Scott Bessent announced that the U.S. had agreed to a framework that would see TikTok transferred to American investors, while still allowing its Chinese parent company, ByteDance, to hold a significant minority stake.
Crucially, under the arrangement, TikTok’s recommendation algorithm will remain with ByteDance, with the U.S. buyers essentially licensing the technology rather than acquiring it outright.
That provision may not strictly align with the letter of the sell-off law, which outlines requirements tied to the operational infrastructure of such platforms. However, the legislation also grants the President discretion to determine the parameters of divestiture “with respect to the operation of a content recommendation algorithm.” In practice, this means the White House holds the authority to sign off on such a compromise — one that leaves TikTok’s U.S. experience virtually unchanged.
Reports point to Oracle as a central player in the deal, continuing its long-standing association with TikTok through its data storage partnership. According to the latest indications, a U.S. consortium will acquire the platform, with Oracle, BlackRock, and Andreessen Horowitz collectively controlling a 50% stake. ByteDance will retain a 19.9% share, keeping some measure of influence under the new structure.
The algorithm, of course, was the most contentious point. Beijing has repeatedly insisted that TikTok’s secret sauce — its recommendation engine — is not for sale. The proposed licensing arrangement appears to be the middle ground that allows the deal to move forward.
So, after years of disputes over data security, foreign interference, and the specter of algorithmic manipulation, TikTok may end up operating much as it always has in the U.S. In effect, a new “TikTok America” entity will be created, but its engine will still be powered by ByteDance’s proprietary systems.
From the user’s perspective, the app will remain identical — the endless scroll of viral clips continuing uninterrupted, despite months of political brinkmanship and speculation of a looming ban.
Whether this outcome adequately addresses the original security concerns is less clear. Lawmakers have never fully disclosed the intelligence that prompted them to pass the sell-off law in the first place. Theories range from TikTok being a potential vector for pro-China influence campaigns to worries about the handling of Americans’ personal data. TikTok, for its part, has already been caught misusing data to track journalists, while U.S. officials continue to warn about China’s broader cyber operations across multiple fronts.
In that sense, questions remain. With the algorithm still effectively under Chinese control — albeit leased to the U.S. — how much oversight will American regulators truly have? Transparency on the system’s inner workings seems unlikely, given Beijing’s firm resistance during negotiations.
Still, for TikTok creators, advertisers, and its 170 million U.S. users, the result looks like a relief. The platform will survive intact, no longer shadowed by the threat of an outright shutdown.
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