A TikTok Sale to Oracle Raises a Slew of Questions

You’ve got questions, we’ve got answers. Or at least more questions.

The multi-act Shakespearian drama that is the fate of U.S. TikTok took another turn this week when The Information reported that owner ByteDance was developing a U.S.-specific app — internally called M2 —  that would presumably allow it to keep functioning in the United States. This app would be sold to TikTok’s American buyer — potentially — getting it around the issue of China-owned app (maybe).

If the new TikTok app launches in September, as the report had it, with possible new owner-operator Oracle or another entity, then the long national nightmare of what would happen to the Sticky, the Kehlani and the Million Dollar Baby in the wake of the 2024 Congressional act to divest-or-ban will finally be over.

Of course there’s also the possibility that pitfalls present themselves and President Trump keeps extending enforcement of the ban indefinitely, as he did a third time last month.

Letters FOIA-ed this week from Attorney General Pam Bondi reveal that Trump has claimed broad “dispensing powers” that allow him to stop the ban on the grounds that it “would interfere with the execution of the President’s constitutional duties to take care of the national security and foreign affairs of the United States” — a claim that has shocked many legal scholars.

Here are six questions given where we stand:

Will the new U.S. TikTok be as good?

One of the big questions hovering over the reconstituted American TikTok is simple: will it be as compelling? The key to the short-form video platform’s success, after all, is just how well the algo can anticipate and feed user appetites — a secret sauce whose ingredients competitors like Instagram’s Reels and YouTube’s YouTube Shorts have simply not been able to source. U.S. buyers know this and are wary of paying that much for what would be an inferior algorithm that ByteDance would no longer control — while allowing ByteDance to continue controlling it would pose the security issues the ban is meant to target. M2 appears to be an end-run around this issue, allowing ByteDance to pour in those ingredients but then stepping away to let Americans run the kitchen. Whether we’ll still be as hungry is unknown.

Will China really not be collecting our information?

The primary reason for the ban were fears that China controlled an app that a third of the American public used regularly, giving it access to all kinds of consumer and personal data the U.S. government would really, really prefer a foreign superpower doesn’t have. A divestment would nominally clear that hurdle — but M2 would be built by ByteDance, raising questions about how walled-off user data really would be from Chinese authorities. In turn…

Would China approve the deal?

Any ByteDance spinoff has to be cleared by the Chinese government. The assumption is that the right chunk of change — and Oracle, at least, could shell out the possible $40 billion in cash and stock to get it done — might be sufficient sweetener. But China is in a trade war with Trump, and Beijing either could condition a sale on his easing of the levies, which he may not do. Or it could reject the deal outright and paint Trump into a corner. Trump, at least, says he’s optimistic, telling reporters Friday that “I think we’re gonna start Monday or Tuesday…talking to China, perhaps President Xi or one of his representatives, but we would, we pretty much have a deal…I think it’s good for them. I think the deal is good for China and it’s good for us.”

Do the Ellisons become one of the most powerful families in media?

If Larry Ellison and Oracle — already a TikTok tech partner — become the owner of the new U.S. outfit, as Trump has repeatedly suggested, then it could pave the way  for an emergent media dynasty. Larry’s son David Ellison is now closing on a deal to buy Paramount, so the move would put the family in control of one of the leading Hollywood content companies and the leading social-media companies at the same time — a reality that has not abided since the Murdochs owned MySpace, and perhaps even then.

Does TikTok go the Twitter-ian way of far-right quicksand pit?

It’s no secret that Ellison is pals with Trump, having donated to his recent inauguration and thrown campaign fundraisers for him, while Oracle co-president Safra Catz served on the transition team in Trump I. Do such allegiances make the TikTok product, which compared to other platforms has been less political, take a hard-right turn? That’s what allegedly happened to Twitter when Elon Musk began vocally supporting Donald Trump in his re-election bid last cycle, the site appearing to privilege far-right conspiracy theories and shadowban many progressive voices, prompting a Democratic exodus. Given Ellison’s lower volubility than Musk it seems a less likely, but hardly implausible, scenario under Ellison’s potential new TikTok ownership.