TikTok USA to get separate algorithm and different owners
Possible Chinese influence on TikTok USA is to be replaced by possible US influence. The White House is becoming more specific.
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Oracle and financial investor Silver Lake are set to play a key role in TikTok's future in the United States. The short video service will soon operate differently in the US than in the rest of the world. Although TikTok will license the algorithm used to select videos to TikTok USA, it will then be retrained using user data in the US.
This was revealed by a senior White House official to the New York Times. According to the report, US investors, including Oracle and Silver Lake, will acquire around 80 percent of TikTok USA. The exact composition of the buyer group has not yet been finalized. In any case, TikTok's Chinese parent company, Bytedance, and other Chinese companies are to hold less than 20 percent of TikTok USA. Bytedance is to receive one of seven seats on the board of directors of the former US subsidiary. This board is to be composed exclusively of individuals who have received approval from the US government (national security clearance).
Oracle will take on the lucrative task of hosting the data of TikTok's US users in a cloud created specifically for this purpose. Oracle will also "monitor" changes to the algorithm and updates to the TikTok app. Access to American user data from China is prohibited by contract. Retraining the selection algorithm will influence which videos Americans get to see.
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The agreement is an attempt to strike a balance between the US ban on TikTok and Chinese law, which requires Chinese control of the algorithm. Bytedance is majority-owned by Western investors, which encourages willingness to make such a compromise. It could take months to work out all the details and contracts. Until then, TikTok will continue to operate in the US despite the ban. US President Donald Trump has extended an exemption for another 120 days. The law only provides for this if Bytedance can demonstrate genuine steps toward selling TikTok. Since a complete sale is not intended, this condition is unlikely to be met. Officially, the law is called the Protecting Americans from Foreign Adversary Controlled Applications Act.
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