The United States and China have reached a tentative agreement on a framework that would let the popular video-sharing app TikTok keep operating in the US market. This is a big step down from a long-standing technological standoff.
This progress is a big step toward ending a bitter fight that had put a lot of pressure on the app’s parent company, ByteDance, and threatened to block the service for millions of US users.
Based on the initial terms, the main point of the agreement is to create a new company called TikTok Global. This new company will be responsible for running all of TikTok’s business in the US and a few other important markets around the world.
To address the US government’s repeated concerns about national security, TikTok Global will be mostly owned by American investors, including well-known companies like Oracle and Walmart. The way this company is set up makes sure that US users’ data is safely stored and managed in the US, where the Chinese government can’t get to it.
A fragile agreement with details that still need to be worked out
The agreement hinges on the establishment of TikTok Global and the assumption of American ownership. However, both governments still need to approve some important details. The exact details of TikTok’s technology partnership with Oracle, which is likely to become the company’s trusted cloud provider, are still being worked out.
The exact number of new jobs that will be created in the US and the final makeup of the company’s board of directors are also things that need more negotiation and agreement. The deal, as it stands now, is a shaky agreement to agree on the basic rules that will guide TikTok’s future. The details of the deal’s legal and technical aspects will be worked out in the next few days.
If this deal gets full official approval, it would seem to meet the requirements of President Donald Trump’s executive order, which said that ByteDance had to sell off its US assets or face a complete ban. Big US companies like Oracle and Walmart are involved, which gives the app a way to keep working while apparently cutting off China’s control over it.
The deal is a compromise for the Chinese government, which had just changed its export control rules to include cutting-edge AI algorithms like the one that powers TikTok’s addictive feed. It stops a full divestiture and lets ByteDance keep a stake in the very valuable asset it made.
The success of this high-wire act now depends on the final negotiations, which turn this initial agreement into something that everyone can agree on and work with.
