The U.S. and China have reportedly reached a framework agreement that could allow TikTok to continue operating in the U.S., according to the New York Post. After two days of talks in Madrid, officials from both countries said they had settled on the basic structure of a deal that avoids a nationwide ban of the app.

Majority control shifting to American investors: A new $50 billion U.S. company

The plan would see American investors take majority control of a new company valued at up to $50 billion. That entity would operate TikTok in the United States. Reported investors include Jeff Yass of Susquehanna International and Bill Ford of General Atlantic Partners, with additional involvement from Andreessen Horowitz, Blackstone, KKR, and others, The Financial Times reports.

Under the structure reported by the Financial Times, U.S. investors would own about half of the new business, while existing large shareholders such as General Atlantic, Susquehanna, and KKR would hold roughly 30 percent. ByteDance would keep a 19.9% minority stake while continuing to run TikTok’s global operations outside the U.S.

Algorithm control shifts to U.S. engineers

As part of the deal, TikTok’s recommendation system, which determines what users see in their feeds, would be managed by U.S. engineers instead of its Chinese parent, ByteDance.

This means that control of TikTok’s U.S. algorithm could shift to the U.S. Wang Jingtao, deputy head of China’s cybersecurity regulator, confirmed that the framework includes licensing the algorithm and related intellectual property rights.

Oracle’s role and cloud infrastructure

The agreement also includes Oracle as a cloud service provider for the new U.S. TikTok entity, the report says. However, it remains unclear whether co-founder Larry Ellison will hold a direct stake in the company. His son, David Ellison, could step in with an equity role.

Political backdrop and next steps

The agreement comes after years of uncertainty about TikTok’s future in the U.S. A law signed by former President Joe Biden required ByteDance to divest its U.S. operations or face a ban. This stemmed from concerns over national security threats. 

Former President Trump, who previously pushed to ban the app, has now expressed support for the new framework, writing that talks with President Xi Jinping went “very well.” “A deal was also reached on a ‘certain’ company that young people in our country very much wanted to save. They will be very happy!” he said on Truth Social.

TikTok briefly went offline in January before Trump signed an executive order delaying the enforcement of the law. That deadline has been extended several times, most recently to September 17. Trump and Xi are expected to meet on Friday, a discussion that could finalize TikTok’s future in the U.S.

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