Oracle Weighs National Security Risks in TikTok’s US Operations Sale

The proposal suggests that Oracle would vouch for the safety of TikTok’s U.S. user data, including guarantees that no “back door” would allow the Chinese government to exploit the platform. The deal would also potentially leave TikTok’s influential algorithm under the control of its Chinese parent company, ByteDance, a key point of contention in the ongoing discussions.

This plan is emerging with increasing urgency, as the U.S. government faces a looming deadline to finalize a solution before April 5. Under the current law, TikTok’s Chinese ownership must divest to mitigate potential national security risks. President Donald Trump issued an executive order on his first day in office, extending the deadline and providing additional time for negotiations.

Oracle’s involvement is not new—since 2020, Oracle has been collaborating with TikTok under a partnership called Project Texas, which focuses on securing U.S. user data. However, this latest proposal raises significant questions about the future structure of TikTok’s relationship with its parent company and the Chinese government.

Per Bloomberg, while Oracle’s participation could help facilitate a deal with Chinese authorities, the proposal is still tentative and subject to change. If finalized, any deal would require approval from both the U.S. government and ByteDance, as well as the Chinese government.

Read more: TikTok Urges US Appeals Court to Overturn Law Mandating Sale of US Assets

A key sticking point is the retention of TikTok’s algorithm by ByteDance. U.S. lawmakers and security officials have expressed concerns that the Chinese government could access sensitive data or use the platform for propaganda purposes—a charge that both ByteDance and Chinese officials have repeatedly denied. According to sources, Chinese authorities are likely to accept Oracle’s role in the deal as long as the algorithm remains in China’s control, which may simplify negotiations with Beijing but complicate compliance with national security laws in the U.S.

The Biden administration, which inherited the national security concerns related to TikTok from the Trump administration, has yet to comment on the specifics of any proposal. Spokespersons for Oracle and the White House declined to respond to requests for comment, while TikTok and ByteDance also refrained from issuing statements.

Bloomberg also reports that the U.S. remains one of TikTok’s most important markets, with estimates valuing TikTok’s U.S. business at as much as $50 billion. While ByteDance’s direct involvement in the ongoing talks remains unclear, the process has attracted several potential bidders. Publicly known parties include a consortium led by billionaire Frank McCourt and Reddit co-founder Alexis Ohanian, as well as a group featuring tech entrepreneur Jesse Tinsley and YouTube star MrBeast. San Francisco-based Perplexity AI has also proposed a merger.

Microsoft Corp. has been mentioned as a possible bidder, though the company has not confirmed its interest. Similarly, while President Trump has suggested that Oracle’s Larry Ellison could be a key figure in any deal, and Chinese officials have reportedly explored the possibility of Elon Musk acquiring TikTok in the U.S., Musk himself has stated he is not interested in pursuing the acquisition.

Despite its considerable role in the tech infrastructure sector, Oracle faces significant challenges in this deal. The company is currently focused on building data centers and is burdened with debt from previous acquisitions. A large-scale investment or full acquisition of TikTok’s U.S. operations may be outside the realm of possibility due to Oracle’s financial commitments and strategic focus.