US, China Near Deal to Keep TikTok in U.S. by Recreating Recommendation Algorithm, Sources Say

U.S. and Chinese officials are nearing a framework that would keep TikTok operating in the United States by enabling a U.S.-based company to recreate the app’s recommendation algorithm, according to people familiar with the talks.

The arrangement under discussion would sell a controlling stake in TikTok’s U.S. operations to a group of American investors and allow U.S. engineers to replicate and replace the platform’s so-called “secret sauce” algorithm, sources told On The Money and other outlets. The deal would create a new U.S. firm serving TikTok’s roughly 172 million U.S. users and could be valued at as much as $50 billion, the sources said.

The White House has confirmed officials have settled on a “framework” for an agreement after months of negotiations that have pitted national security concerns against political and commercial considerations. The plan, as described by people briefed on the discussions, would give majority ownership of the new U.S. company to investors including billionaire Jeff Yass of Susquehanna International and Bill Ford of General Atlantic Partners, while ByteDance — TikTok’s China-based parent — would retain a 19.9% stake in the new U.S. entity.

Administration officials and negotiators led by Treasury Secretary Scott Bessent were reported to be finalizing details ahead of a planned call between President Donald Trump and Chinese President Xi Jinping, scheduled for Friday. A White House spokesman and a spokeswoman for Bessent did not immediately comment when asked about the negotiations.

Under the proposal, Oracle co-founder Larry Ellison would play a role by hosting the new company’s operations in his cloud, though it was not clear whether Ellison would take an equity position while Oracle provides hosting. Some sources said David Ellison, founder of Skydance, was being discussed as an alternative investor.

The ownership and control of TikTok’s recommendation algorithm has been the central sticking point in broader U.S.-China trade talks and in congressional scrutiny of the app. U.S. law passed last year, which the Supreme Court has deemed constitutional, effectively requires Chinese ownership or control of TikTok to be severed for the app to remain in operation in the United States. Administration officials said they believe a recreated and U.S.-controlled algorithm would satisfy that statutory requirement.

The talks come as a deadline to force TikTok’s removal from U.S. app stores loomed. President Trump had extended multiple deadlines and, according to people with knowledge of the matter, threatened to let the app go dark as leverage in trade discussions. News of the emerging framework broke late Sunday; people close to the negotiations said additional extensions might be necessary given the technical and legal complexity of creating a new algorithm and transferring operations.

Republican lawmakers who have pushed for restrictions on TikTok have argued the app poses national security risks because of potential Chinese government access to user data and influence over content. Some lawmakers and experts have also raised concerns about the platform’s effects on teenagers’ mental health. Administration officials say the proposed structure was designed to address both categories of concern by ensuring no Chinese control over the algorithms that drive content delivery in the U.S.

ByteDance would retain full ownership of TikTok’s other international operations, which the company and some market estimates value close to $300 billion. Under the reported framework, the U.S. company would be able to replicate the functionality of TikTok’s recommendation system without direct Chinese control over the underlying proprietary system that governs what users see.

People briefed on the negotiations described considerable investor interest now that a path forward appears likely. “Everyone and their dog wants a piece of this thing now that it looks like it will have the full blessing of Trump, Congress and the Chinese,” one potential investor told On The Money. The proposed investor group reportedly includes a number of additional, smaller backers seeking equity stakes.

While negotiators and officials said they had reached agreement on major points of a framework, people familiar with the matter cautioned the situation remained fluid and details could change. Some U.S. lawmakers who have taken a hawkish approach to China warned that technical safeguards and oversight measures would need to be ironed out before they would support any deal.

The discussions reflect a broader calculus in Washington about how to balance geopolitical concerns with the market and political realities of a platform used by tens of millions of Americans, especially younger users. Officials involved in the talks said they are working under time pressure to reconcile legal, technical and diplomatic issues and to set up governance and compliance regimes that would be acceptable to U.S. regulators and lawmakers.

Negotiators declined to provide a public timetable for completing the deal, and the parties involved continue to negotiate mechanics for technology transfer, oversight and operational control. The proposal, as described by sources, would leave ByteDance with a minority stake in the U.S. business while permitting a U.S.-based investor group to run and develop the algorithm that determines what content reaches American users.

If completed, the deal would mark a rare compromise in a period of heightened technology competition between Washington and Beijing, creating a U.S.-controlled version of a globally influential social media product while leaving ByteDance’s broader international operations intact. Officials said they hope the framework will be finalized in time to avoid an immediate shutdown of TikTok in the United States, but cautioned that legal and technical work remains to be done before any final agreement is signed.