This article first appeared on GuruFocus.

Oracle (NYSE:ORCL) is stepping into the spotlight as the central player in a deal that could reshape TikTok's U.S. operations. Under a plan outlined by the White House, Oracle would rebuild and secure a U.S.-only version of the app's recommendation software, retraining the algorithm from the ground up while hosting all American user data in its cloud. ByteDance, TikTok's Chinese parent, would lease a copy of the technology but would not have operational control or access. The design is intended to address bipartisan concerns in Washington that TikTok could be vulnerable to foreign influence, while giving U.S. investors direct oversight of the platform's technology and governance.

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President Donald Trump, after speaking with Chinese President Xi Jinping, indicated both sides had reached a consensus to move forward. He is expected to sign an executive order this week to formalize approval of the sale, while also extending the deadline for ByteDance's divestiture by 120 days. The new U.S. venture would reduce ByteDance's stake below 20%, with six of seven board seats controlled by American directors and the remaining seat held by ByteDance but excluded from the company's security oversight. Beijing, for its part, stopped short of full endorsement, instead stressing that any outcome must comply with Chinese law.

For Oracle, the agreement builds on its existing multibillion-dollar Project Texas relationship with TikTok, where it already provides cloud services and manages user data. The company, alongside investors such as Silver Lake and Andreessen Horowitz, would also partner with the U.S. government on application development, source code review, and continuous monitoring of the algorithm. While questions remain about whether lawmakers will accept a model that still incorporates ByteDance's technology, the arrangement could position Oracle at the center of one of the most significant technology transactions of the year, with potential long-term upside for its cloud infrastructure business.