TikTok’s American business is on the verge of a dramatic restructuring. Oracle Corp., venture capital giant Andreessen Horowitz, and private-equity firm Silver Lake Management LLC are poised to acquire the platform’s US operations.
The plan is expected to be discussed by President Donald Trump and Chinese President Xi Jinping later this week.
A US-based TikTok emerges
Senior US and Chinese officials revealed the framework Monday after two days of negotiations in Madrid. The proposal would create a US-domiciled version of the video-sharing app, with Oracle, Andreessen, and Silver Lake all taking equity stakes.
The agreement is intended to satisfy a 2024 U.S. law requiring TikTok’s Chinese parent, ByteDance Ltd., to divest its American arm or face a nationwide ban.
Under the initial terms, ByteDance’s ownership in the US business would drop below 20%. Existing US investors would hold roughly 30%, while a new investor group would control 50%.
The restructured entity would be spun off from ByteDance entirely, stripping the Beijing-based company of any operational role. This included influence over TikTok’s recommendation algorithm, as mandated by the divestiture law signed by then-President Joe Biden.
Technology & cloud infrastructure
Engineers in TikTok’s US division have been testing a parallel app that replicates the recommendation engine that captured the attention of 170 million American users.
Beijing confirmed that ByteDance would license the underlying technology to the new company.
Oracle will remain a critical partner, continuing to provide cloud infrastructure for TikTok’s US operations. The Austin-based company already stores American user data through a multibillion-dollar arrangement known as Project Texas.
Oracle’s shares briefly jumped as much as 5.9% last Tuesday before paring gains. They are up 84% year-to-date thanks to its expanding cloud business.
Price tag & ownership
Valuations for TikTok’s US operations hover between $35 billion and $40 billion. However, the rapid rise of artificial intelligence has pushed tech valuations sharply higher.
Precise ownership stakes for each investor remain uncertain. The word on the street is that Oracle is likely taking only a modest share.
Despite the unveiling of the framework, a senior White House official cautioned that all details remain speculative until the administration issues a formal announcement. Representatives for TikTok, Oracle, Andreessen Horowitz, and Silver Lake declined to comment.
Geopolitical calculus
The negotiations highlight how the fate of one of China’s most valuable private companies, ByteDance (worth over $330 billion), has become entangled with US-China relations.
The plan closely resembles a proposal that nearly closed earlier this year before collapsing when Beijing balked after Trump imposed sweeping tariffs on Chinese goods.
Without a TikTok accord, a planned meeting between Trump and Xi later this year was at risk. Trump told reporters on Tuesday, as he departed for a state visit to the United Kingdom, “I have a deal on TikTok,” though he declined to identify the participating companies.
“I’m going to speak to President Xi on Friday to confirm everything up,” he added. “We made a very good trade deal, and I hope good for both countries.”
However, as Trump is notorious for falsifying and embellishing information, this needs to be taken with a grain of salt.
Regulatory deadlines & political context
Trump has repeatedly extended the divestiture deadline to keep TikTok accessible to US users. On Tuesday, he granted a fourth extension to December 16, even though the 2024 statute allows for only one 90-day reprieve.
The maneuver has sparked debate about the legal validity of multiple extensions but ensures that Apple and Google can continue to host the app while negotiations proceed.
Treasury Secretary Scott Bessent told CNBC the new framework mirrors commercial terms worked out earlier this year.
“This deal wouldn’t be done without proper safeguards for US national security,” Bessent said. “It seems as though we were also able to meet the Chinese interest.”
If finalized, the deal would let TikTok keep operating in the US while reducing ByteDance’s influence to a minority stake.
This would resolve the national security dispute that has stretched for over a year and reshape the global reach of China’s peak social media export.
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