Potential TikTok Deal Could Keep Chinese Algorithm in U.S. Version
Key Points
- Potential TikTok agreement discussed on a Monday before a Trump administration deadline
- Chinese regulator Wang Jingtao confirmed licensing of the algorithm and other IP rights
- U.S. Treasury indicated the new version would retain "Chinese characteristics" but be controlled by American investors
- Perplexity AI offered to purchase TikTok and rebuild its algorithm for U.S. users
- Oracle, which stores U.S. TikTok data, was close to a deal giving it a stake and data oversight responsibilities
- The arrangement seeks to address security concerns while maintaining platform continuity
- Final terms remain under negotiation and will influence future handling of foreign‑origin tech in the U.S.
A potential agreement between the United States and China on the future of TikTok could allow the American version of the app to continue using the Chinese‑origin algorithm under a licensing arrangement. Chinese regulator Wang Jingtao said the deal would involve licensing the algorithm and other intellectual property rights. U.S. Treasury officials indicated the new version would retain some Chinese characteristics while being controlled by American investors. Companies such as Oracle and Perplexity AI have been mentioned as possible partners in restructuring or overseeing the platform's data and technology.
Background of the Negotiations
A potential TikTok deal emerged on a Monday, just days before a deadline issued by the Trump administration that required a decision on whether the app should be sold or banned. The discussions focused on how the U.S. version of TikTok would operate if the platform remained in the United States.
Licensing the Chinese Algorithm
According to statements from Wang Jingtao, the deputy director of China’s national internet regulator, the agreement would include “licensing the algorithm and other intellectual property rights.” This suggests that the core recommendation engine that drives user experience on TikTok could remain the same, even after the transaction is completed.
U.S. Oversight and Investor Control
U.S. Treasury officials, citing remarks from Treasury Secretary Scott Bessent, indicated that the revised U.S. version of TikTok would retain “Chinese characteristics” but would be governed by American investors. The intention is to preserve the app’s functionality while ensuring that ownership and oversight are aligned with U.S. interests.
Corporate Interest and Proposals
Several American entities have been linked to the prospective restructuring. Perplexity AI proposed itself as a buyer, promising to rebuild TikTok’s algorithm for a U.S. audience. Meanwhile, Oracle, which has hosted TikTok’s U.S. user data since 2022, was reported to be near an agreement that would give it a modest stake in the company and responsibility for data handling. Oracle’s involvement also includes ongoing reviews of the algorithm’s operation.
Implications for U.S. Tech Policy
The potential deal reflects a broader effort by U.S. policymakers to address concerns about foreign technology influence while avoiding a complete ban that could disrupt millions of users. By licensing the algorithm and placing American investors in control, the arrangement aims to balance national security considerations with continuity of service.
Next Steps
While the discussions are ongoing, the parties involved are working to finalize terms that satisfy both regulatory requirements and commercial interests. The outcome will shape how TikTok operates in the United States moving forward and could set a precedent for future negotiations involving foreign‑origin technology platforms.