What does the Oracle deal and China's silence indicate about the wavering TikTok transaction between Trump and China?

1. Announcement of "Agreement" and Beijing's "No Comment"

"The phone call was very good. Thank you for approving TikTok"—President Trump declared victory on Truth Social on September 19. However, on the same day, the Chinese Ministry of Foreign Affairs only stated in its announcement, "We respect the will of the enterprises and welcome productive commercial negotiations that align with market principles and Chinese law," without indicating the existence of an agreement. The stark difference in interpretation of the "same phone call" between the two parties is because this case has transformed from a pure corporate acquisition into a comprehensive negotiation involving mutual concessions between the U.S. and China and domestic politics.WIRED

2. Framework of the Deal: 80% U.S. Side, Algorithm "U.S. Controlled"

Based on current reports, the framework appears as follows: A consortium of investors including Oracle, Silver Lake, and Andreessen Horowitz (a16z) will hold about 80% of TikTok's U.S. operations. The board of directors will have six out of seven seats occupied by the U.S. side, and the algorithm will be under U.S. control. Data will continue to be stored and operated on Oracle's U.S. infrastructure—this direction is suggested by the White House and major media.PoliticoReuters

This "U.S. majority, China minority" governance could formally meet the requirements of the PAFACA law set by the U.S. Congress (severing control from "foreign adversaries"). However, reports also suggest the inclusion of a plan to license ByteDance's technology and "reconstruct" an equivalent recommendation algorithm, requiring further verification of operational independence.WIRED

3. Legal Minefield: The "Final Deadline" Extended Repeatedly

The PAFACA law was enacted in April 2024. If designated apps do not complete a "qualified sale" within 270 days, distribution and hosting, etc., will be prohibited. TikTok was temporarily suspended and removed from stores in mid-January 2025, but after a change in administration, the execution grace period was repeatedly extended by executive order, with the current deadline being December 16. Here, a strict interpretation of "the law only allows one extension" clashes with constitutional arguments over "presidential discretion for continued negotiations."Wikipedia

4. Remaining Fundamental Risks: Dual Control of "Ownership" and "Technology"

Experts in Washington strongly point out that "transferring ownership alone does not resolve security concerns." How much control can the U.S. side have over the origin of the algorithm, model learning assets, A/B testing environment, and recommendation operation policies? Additionally, the issue of platform governance remains, where differing censorship and expression norms between the U.S. and China could affect "discoverability." The White House emphasizes "the U.S. controls the algorithm," but the transparency of implementation design will be questioned moving forward.Politico

5. "Equivalent Exchange" in Negotiations: A Sidebar Bargain for Improved Investment Environment

In recent days, the Chinese side has been demanding a "fair and non-discriminatory business environment for Chinese companies" from the U.S. Instead of isolating TikTok, the structure seeks a "return" in the form of broader barrier reduction, including inbound investment, export controls, and predictability of reviews. This implication was suggested in the Xi-Trump phone call.Reuters

6. Business Consequences: Oracle's Cash Flow and the Extension of "Project Texas"

Oracle is expected to continue managing the infrastructure operations of TikTok U.S., making the project a crucial support for the company's cash flow. In the extension of "Project Texas" (U.S. data separation) that began in 2022, Oracle's role will expand to "supervision + operation." For the company, which is burdened with cloud investments and AI infrastructure expenditures, stable revenue is a strategic tailwind.Barron's

7. Reactions on Social Media: Relief, Doubts, and Irony Coexist

• Creators: In local station interviews, while voices are raised about revenue being shaken by long-term uncertainty, there is also relief with statements like "I want to return if it continues." Those dependent on the project continue to express caution and diversification.https://www.alaskasnewssource.com

• Marketing/Advertising: Industry journals for influencer marketing warn, "There is a framework, but uncertainty continues." Proposals include revising quarterly plans and creative operations based on multi-platform distribution of short videos.Hello Partner

• Politicians and Experts: Conservative lawmakers express strong concerns that "influence will remain if dependence on ByteDance technology continues." Multiple media and key figures on X also raised doubts about the effectiveness of governance and "favoritism."Reuters

Overall, while "freeze fatigue" spreads with the timeline being extended again, creators and advertisers feel short-term relief from avoiding a "sudden stop," while policy circles are clearly polarized with long-term concerns about "lack of technological separation."

8. What Will Happen Next: Four Verification Points

1. Algorithm Jurisdiction: Are the ownership and operational rights of learning data, feature management, and evaluation infrastructure completely on the U.S. side? What about auditability?Politico

2. Board of Directors and "Golden Share": In addition to the six U.S. seats, how far does the supervisory authority appointed by the government extend?Reuters

3. License vs. "Replication": To what extent is technical separation ensured against the licensed use of ByteDance technology?WIRED

4. Deadline Management: Is further extension possible beyond the December 16 deadline? What is the alignment between executive orders and statutory law?Akin - Akin, an Elite Global Law Firm

9. Conclusion: "Institutional Design" Beyond the Screen

TikTok is not just an app. It is a case of "institutional design" involving algorithms, data localization, plurality of expression, and the levers of trade. Whether the agreement is genuine or a political message, what is being questioned is the accountability of "who controls what procedures and to what extent." More than which side, U.S. or China, "wins," the true victory lies in whether sustainable transparency can be established for users, creators, and companies.

Powered by Froala Editor