The Corporate Third Party in the Chinese-U.S. TikTok Deal

The Corporate Third Party in the Chinese-U.S. TikTok Deal

What began as simply a platform to share and view videos has ballooned into a multi-billion-dollar company that now stands at the center of the most prominent technological conflict between Washington and Beijing in years. Since 2020, TikTok has served as a vital chip in the high-stakes bargaining game between the United States and China. Efforts to settle the app’s future have lasted several years, spanning the passage of the Protecting Americans from Foreign Adversary Controlled Applications Act, ByteDance’s subsequent lawsuit, a nationwide ban deadline originally set for January 19, 2025, and three enforcement extensions ordered by President Trump. In spite of these numerous efforts, the two nations have yet to reach an agreement. With legal deadlines looming and political pressure mounting, attention has shifted from government action to powerful private actors who promise to engender a compromise that can satisfy all parties.

Role of Private Corporations 

Private corporations may ensure TikTok’s survival in the United States. The app, owned by Chinese internet technology company ByteDance, has come under scrutiny as U.S. concerns over data privacy and national security have intensified over the years. In 2017, the United States Trade Representative (USTR) opened a Section 301 investigation into the Communist Party of China’s (CPC) behavior related to forced technology transfer and data theft, and found that TikTok had exploited the Apple iOS system to discover information stored by users. Several other laws signed by the People’s Republic of China (PRC), such as the Cryptography Law and Data Security Law in 2020, sparked suspicion and heightened tensions between the two powers. As a result of these findings, then President Trump issued Executive Order 13873, which endeavored to outline a plan to mitigate the threat posed by TikTok through the prohibition of certain transactions by ByteDance to prevent the transfer of Americans’ personal data to the PRC and to safeguard national interests. 

Amidst trade war talks, a phone call between President Donald Trump and Chinese leader Xi Jinping suggests that the two parties have agreed to hand off ownership of TikTok to the private sector. This tentative consensus may pave the way for a corporate consortium, meaning a coalition of private companies that join together to undertake a major investment. By pooling financial resources, technological expertise, and political credibility, a corporate consortium could both reassure U.S. regulators about data security and maintain TikTok’s commercial viability. A senior White House official stated that, under this new framework, the private-sector actors will include Oracle Corporation and Silver Lake Technology Management to spearhead the takeover. 

Reports indicate that Oracle and other joint venture partners will acquire 80 percent of the company through the deal, along with domestic user data and influence over the algorithm. This new agreement would thus give U.S. investors significant influence over TikTok’s infrastructure, data policy, and programming. The terms and China’s approval remain unclear, but President Trump is ready to finalize the deal with an executive order.

“Retraining” TikTok’s Algorithm   

With a new corporate framework in place, consumers and investors alike are wondering how TikTok’s core algorithm will be reshaped. Trump administration officials stated TikTok “will be ‘retrained’ along with U.S. data to make sure that the system is ‘behaving appropriately.’” Retraining an algorithm entails coaching the existing software model with fresh data so its predictions or recommendations adequately adjust to new rules and conditions. In this case, the new owners of TikTok will have to run TikTok’s recommendation software on U.S. user data to engender results reflective of America’s oversight and content standards. Although Washington is mainly concerned with Chinese manipulation of media, American corporations, too, have the power to skew TikTok feeds — often in more subtle ways. Some users may feel safer with TikTok under American control, but others fear that this merely swaps one surveillance regime for another. Most cybersecurity experts aver that Oracle’s federal regulations will relieve data concerns through third-party inspections and cloud management, while others predict the Trump administration might begin to influence the platform’s content. Additionally, proposals like Project Texas, which seek to localize TikTok’s operations through partnerships with American corporations such as Oracle, are more likely to be fully implemented under this new system. 

The consequences of technical retraining are only one point of contention regarding the coming merger; its social and political consequences may prove more severe. Research finds that digital media algorithms repeatedly promote the dissemination of extremist political content, making it difficult for the moderate voice of the majority to make itself heard. These digital patterns are becoming more apparent in American media, but studies are only beginning to interpret and analyze their effects. The TikTok deal will introduce a U.S. investor consortium that can control which videos get boosted, and consequently steer digital subculture shifts. If the retrained algorithm leans into highly charged content, it will reward highly polarizing kind of material that drives the most engagement. Some users will embrace trusted governmental control, while others may migrate to other digital spaces, accelerating fragmentation. This deal goes beyond a change in leadership, but carries the potential to reshape what content is visible and foster greater polarization. 

TikTok’s Influence on U.S.-China Relations 

These developments in the TikTok deal mark a new era in U.S.-China technology relations. This arrangement lowers immediate security tensions and allows both governments to claim a partial win, but it does not diminish the feelings of mistrust that color Sino–American relations. It instead signals a shift from outright bans to more subtle methods such as audits and licensing battles. Future ties between Washington and Beijing will likely follow this pattern: managed coexistence, steady negotiation, and repeated testing of how much control each side can keep over its key digital platforms.