Quick overview

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Oracle would be part of the consortium that would purchase TikTok’s US operations. President Donald Trump is scheduled to meet with Chinese President Xi Jinping this week to discuss a deal involving Andreessen Horowitz and private equity firm Silver Lake Management LLC.

Silver Lake, Oracle, and venture capital firm Andreessen will all own shares in the new business. If a deal is reached, it will settle a point of contention in Washington-Beijing relations and help determine the future of China’s most valuable private company, a $400 billion startup whose video product attracted 170 million users, primarily young Americans, before being classified as a national security threat.

ByteDance’s ownership of TikTok will fall below 20 percent to comply with a US law set to take effect in 2024. This law requires the Beijing-based company to sell off its assets or face a ban from the US market. A source familiar with the terms of the agreement indicated that users of the app would transition to a new platform once the sale is finalized.

TikTok’s US engineers have tested the new app, which will replicate the recommendation algorithms that originally made the platform popular. A Beijing official stated that ByteDance will license the underlying technology as part of the framework agreement.

Additionally, the agreement stipulates that Oracle will continue providing cloud services to TikTok in the US, which has become a reliable source of income for the Austin-based company. TikTok and Oracle already collaborate to host user data in the US and other countries.