'Security from what?': The unanswered questions about how Trump's TikTok deal will work Ben WerschkulSeptember 25, 2025 at 3:00 AM 0 President Trump is set to sign an agreement later this week to formalize the spinoff of TikTok's US operations from Chinabased ByteDance.
- - 'Security from what?': The unanswered questions about how Trump's TikTok deal will work
Ben WerschkulSeptember 25, 2025 at 3:00 AM
0
President Trump is set to sign an agreement later this week to formalize the spin-off of TikTok's US operations from China-based ByteDance.
It's a move to start the clock on a sequence of events, from getting China's final approval and closing a deal likely worth tens of billions of dollars to implementing a complex technical framework.
And all with a promise that these fundamental changes will go forward in a way that US users may not even notice.
Three milestones will be closely watched to see how bumpy that road may be.
One, this new American joint venture needs to decide how it will be organized. Two, it has to show how it will overcome sizable technical challenges. Three, it has to mollify a skeptical Congress.
And on top of that, China has to offer its final approval at a time when TikTok is likely to remain an ongoing topic in trade talks.
TikTok's offices in Culver City, Calif.. (AP Photo/Damian Dovarganes, File) ()
Asked this week about whether he expects it to all work, the Hudson Institute's Michael Sobolik offered a simple reaction: "I'm not sure."
The China specialist added that the key questions revolve around Oracle (ORCL) and its role as the security provider for the spun-off app.
"When they talk about Oracle providing security, that introduces the question of security from what?" Sobolik said, noting that America's ability to secure and exercise full control over the app's algorithm and US user data remains far from a given.
Unanswered questions
What the White House has promised this week is a new American-controlled joint venture to be based in the US and controlled by American investors who will have a majority of the new company's ownership stake and its board seats.
The new joint venture is set to be controlled by a US investor group led by Oracle, as well as venture capital firm Andreessen Horowitz and private equity giant Silver Lake.
Up first, says data privacy and cybersecurity attorney Lily Li, are questions of exactly what structure the new company will have.
"A first step here would be ironclad corporate controls," she noted this week, pointing out that the company's ability to offer oversight and security might hinge first on the structure of the business and how independently it is able to act from Chinese parent company ByteDance.
President Donald Trump departs from the White House in Washington on Monday. (SAUL LOEB/AFP via Getty Images) (SAUL LOEB via Getty Images)
That's because ByteDance is set to have clear points of leverage.
The China-based company will maintain an equity stake of up to 20% in the new US-based company, has often described its ambition to stay closely involved, and will have an ongoing business relationship as the licensor of TikTok's valuable content recommendation.
The plan — as outlined by the White House — is for the new US venture to receive a copy of the TikTok algorithm that will be "fully inspected" and "retrained" on US user data.
A question that remains is what the conditions of the license will be, especially as ByteDance continues operating TikTok in countries outside the US. The two apps will operate in parallel — pulling from both the same underlying algorithm and, apparently, the library of videos.
At the very least "I'd want it to be a perpetual license," says Li, the founder of a California-based firm called Metaverse Law specializing in global data policy, "so you don't have a situation where they can claw back at any time."
So far, the White House hasn't offered a detailed summary of the new corporate structure beyond a plan that six of the seven board seats will be controlled by Americans.
Trump has promised that the new company will be "controlled by very powerful and very substantial American people" and has promised more details soon.
Technical challenges
After these issues of corporate governance are technical questions galore.
The plan is also for this US entity to receive a copy of the algorithm to be retrained and relaunched — all without requiring US users to download a new app.
Press Secretary Karoline Leavitt added this week that US users would have continued access to videos made around the world on the ByteDance-controlled side of TikTok.
That's a tall technical order and one that comes as it appears that Oracle will not have the ability to rewrite the underlying algorithm and will instead serve more of a gatekeeping function.
A senior White House official described Oracle's role this week as providing "top-to-bottom security," acknowledging that the final deal around the algorithm reflects a compromise between US and Chinese laws.
The official described Oracle's role as not rewriting the algorithm but instead "to inspect it, to study how it behaves, and see how it operates" — adding that those inspections can go down to the level of the source code.
Chinese Vice Premier He Lifeng and and Treasury Secretary Scott Bessent are seen during recent trade talks in Madrid that were focused on TikTok. (Xing Guangli/Xinhua via Getty Images) (Xinhua News Agency via Getty Images)
A similar challenge is walling off US user data if ByteDance is still essentially supporting US TikTok users on both ends — from the underlying algorithm to providing many of the videos.
Convincing a skeptical Congress
Lastly, there is a political question around whether skeptical lawmakers who passed the law in 2024 to force a sale of TikTok will be satisfied by the arrangement, even those in Trump's party.
It's unclear if the deal would comply with the letter of that law — which stipulates no cooperation with ByteDance when it comes to the new US app.
And that fact comes as members of Congress in both parties have often expressed frustration with how a law that they wrote and passed last year has been implemented by Trump and his team.
A notable voice of Republican discontent has been Michigan Republican Congressman John Moolenaar, who has long expressed concerns about the algorithm issue.
"The law is clear: any deal must eliminate Chinese influence and control over the app to safeguard our interests," he wrote in an op-ed earlier this year.
He then re-upped his concerns this week, saying what is known about the arrangement "could allow continued [Chinese] control or influence."
Rep. John Molenaar, a Michigan Republican, speaks this summer during a news conference in front of the U.S. Capitol to commemorate the 36th anniversary of the Tiananmen Square protests and massacre. (Alex Wong/Getty Images) (Alex Wong via Getty Images)
Moolenaar and other lawmakers have varied ways to intervene. But whether a Republican-controlled Congress — that often makes noise about asserting its prerogatives before ultimately deferring to Trump — will act remains to be seen.
In any case, Sobolik notes, "it's now or never at this point." Congress will need to weigh in soon, as "we're getting pretty close to the point of no return."
Ben Werschkul is a Washington correspondent for Yahoo Finance.
Click here for political news related to business and money policies that will shape tomorrow's stock prices
Read the latest financial and business news from Yahoo Finance
Source: "AOL Money"
Source: DEVI MAG
Read More >> Full Article on Source: DEVI MAG
#LALifestyle #USCelebrities