TikTok’s US operations would be acquired by an investor consortium that includes Oracle Corp., Andreessen Horowitz and private equity firm Silver Lake Management LLC under a framework deal that President Donald Trump is set to discuss with Chinese President Xi Jinping later this week.
The tentative agreement, unveiled on Monday by senior US and Chinese officials after two days of talks in Madrid, would create a US-based version of the popular social media app, with Oracle, Andreessen and Silver Lake all holding stakes in the new venture, according to people familiar with the matter.
Under the deal, ByteDance’s stake in TikTok would be reduced to below 20% to satisfy a US national security law passed in 2024 that required the Beijing-based company to divest or face a ban of the app in the American market. If completed, with the blessing of Trump and Xi, the transaction would allow the video-sharing platform to keep operating in the US and remove a sticking point in US-China relations.
The deal calls for Oracle to continue providing cloud services for TikTok in the US, a business that has become a steady source of revenue for the Austin-based company. Oracle already works with TikTok to host user data in the US and other countries as part of a multibillion-dollar partnership that TikTok has dubbed Project Texas.
Oracle shares rose as much as 5.9% in New York on Tuesday, before giving up most of those gains. The company’s stock is up 84% so far this year thanks to its ascendant cloud infrastructure business.
It’s unclear how much each prospective investor would acquire under the deal. Oracle, for instance, plans to take a small stake in the new venture, according to one of the people.
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A senior White House official said that any details of the framework agreement should be regarded as speculation unless announced by the administration. Representatives for TikTok, Oracle, Andreessen and Silver Lake didn’t respond to requests for comment.
The fate of TikTok’s lucrative recommendation software — which steers videos to users based on their viewing preferences — remains unclear. A Chinese official said after the talks that ByteDance would license its algorithm to the American operation, while the US side declined to offer details. The law signed last year by then-President Joe Biden stipulates that ByteDance cannot have any operational role, including with the algorithm, once a sale is completed.
Under the agreement, new outside investors would own 50% of TikTok’s US business in a unit that would be spun off from ByteDance. ByteDance’s existing US investors would own about 30% of the new business, cutting the Chinese firm’s stake to just below 20% and allowing it to meet the ownership requirements of the US security law.
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The plan largely tracks with a proposal that had come close to an agreement with ByteDance earlier this year but was derailed when China withheld its approval following Trump’s decision in April to impose sweeping tariffs on the world’s second-largest economy.
TikTok’s future became entangled in the broader negotiations between Washington and Beijing over trade. Had there been no agreement on TikTok, any in-person meeting between Trump and Xi later this year would have been off the table, according to a US official.
On Tuesday, Trump told reporters he had “a deal on TikTok” with the Chinese as he departed the White House for a state visit to the UK, but declined to name the companies involved. “I’m going to speak to President Xi on Friday to confirm everything up,” he said. “We made a very good trade deal, and I hope good for both countries.”
Specific terms of the agreement, and whether it would satisfy the requirements of the national security law, remain unclear. But the will to challenge Trump legally or politically over his approach to TikTok has waned. The president has credited the app with boosting his popularity among younger voters and sealing his comeback election win in November.
To buy time for the transaction to be completed, Trump postponed the deadline for ByteDance to divest TikTok’s US operations. Under the extension announced Tuesday — the fourth granted since January — the company has until Dec. 16 to forge a deal before a nationwide ban sets in.
Trump granted the reprieve even though the 2024 law allows for only one 90-day extension. That posture has defied bipartisan consensus behind the divest-or-ban provision — and has raised questions about whether the president’s repeated extensions have been legally sound.
Tuesday’s extension means TikTok can continue operating in the US while the administration takes more time to strike an accord with ByteDance on a “qualified divestiture” to a non-Chinese owner. Partners like Apple Inc. and Alphabet Inc.’s Google can also continue hosting the popular video app in their online stores.
Treasury Secretary Scott Bessent said in an interview with CNBC that the deal was similar to the commercial terms that had been negotiated earlier in the year and indicated that he believed Trump and Xi would finalise the accord this week.
“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."
