Trump Signs TikTok Deal as Corporate Governance, Data Control Concerns Emerge

In Focus

• President Trump approves purchase of TikTok’s U.S. business from Chinese firm, ByteDance
• U.S. to seek China’s approval of the deal amidst trade talks
• Legal experts raise corporate governance questions over U.S. joint venture company
• Concerns over control of U.S. version of TikTok algorithm and user data by Oracle emerge
• Relaunching TikTok in the U.S. without disruptions poses a major technical challenge

President Donald Trump has signed an executive order approving the purchase of TikTok’s U.S. business from its Chinese parent company, ByteDance. According to Yahoo Finance, the TikTok deal signed by Trump valued the short-form video platform at $14 billion.

By the TikTok deal, President Trump initiates a series of steps. These include getting the final approval from China, closing the purchase deal, and implementing the framework agreed by both countries on the future of the app. The U.S. will be seeking China’s approval of the TikTok sale at a time when the issue remains active in trade talks between the two countries.

Corporate Structure Concerns

As the government pursues TikTok U.S. ownership, experts will have their eyes fixed on the structure of the new TikTok joint venture. The White House promised an American-owned version of the TikTok App under a joint venture that’s controlled by U.S. investors, led by Oracle, Andreessen Horowitz, and private equity firm Silver Lake. However, legal experts have raised questions over the structure of the joint venture.

“A first step here would be ironclad corporate controls,” Data privacy and cybersecurity attorney Lily Li said.

According to Li, the ability of the joint venture to provide security and oversight of the app depends on its structure and the extent to which it is able to run independent of ByteDance. This is particularly important because the Chinese firm has previously expressed its ambition to remain involved in the U.S. TikTok company and will be maintaining a 20% equity stake in it.

As the company that licenses TikTok’s content recommendations, ByteDance will maintain a business relationship with the new company. But legal experts have flagged the conditions of TikTok’s license as an area of concern, particularly because ByteDance will continue operating the app in other countries.

Ideally, the two apps will continue running parallel, drawing from the same algorithm and video library. According to Li, “a perpetual license” would be most ideal “so you don’t have a situation where they can claw back at any time.”

Besides stating that six out of seven board seats in the joint venture will be controlled by Americans, the White House is yet to provide more details about the new company’s corporate structure.

Key Takeaways:

• Ability of U.S. joint venture to provide security and oversight American version of TikTok depends on its corporate structure
• Independence of the U.S. joint venture questioned due to ByteDance stake and content recommendation licensing powers
• Legal experts recommend a the U.S. gets a perpetual license to avoid claw back risks

The Data Control Question

China specialist at the Hudson Institute, Michael Sobolik raised concerns about the TikTok deal unknown workings, adding that big questions relate to software giant Oracle and its role as the security provider for the U.S. version of the app.

“When they talk about Oracle providing security, that introduces the question of security from what?” Sobolik said. On September 22, 2025, White House confirmed that the deal gives Oracle control over the algorithm and security of the U.S. version of TikTok.

“We have American investors taking it over, running it, highly sophisticated. Larry Ellison and Oracle are going to play a very big role in terms of security, safety and everything else,” Trump said September 26, 2025.

According to the plan outlined by the White House, the U.S. company will get a copy of TikTok’s algorithm from ByteDance. Oracle is expected to fully inspect and retrain the algorithm on American user data.

The U.S. planned to ban TikTok over national security concerns. However, President Trump delayed the ban through an executive order when he took office in January 2022 and proposed a joint venture where the U.S. gets a 50% stake as a way of resolving the ban.

Relaunching TikTok in the U.S.

Experts have also raised concerns over the technical challenges surrounding the relaunch of TikTok in the U.S. The joint is expected to retrain and relaunch an American version of TikTok without requiring users to download a new app. This plan poses a huge technical challenge, even as it emerges that Oracle may not be able to rewrite TikTok’s underlying algorithm. Instead, the software giant will most likely perform a gatekeeping role.

Earlier this week, a senior official at the White House described Oracle’s role as offering “top-to-bottom security,” a statement that points to a compromise between US and Chinese laws regarding the algorithm. According to the official, Oracle will not be rewriting the TikTok algorithm, but will only inspect it. This could pose a challenge in walling off American user data if ByteDance continues to support users on both ends.