After months of high-stakes posturing, leaked frameworks, and shifting deadlines, a domestic TikTok ownership deal may be closer to reality. But details of the arrangement from both sides of the Pacific are sparse, leaving room for lingering national security, legality, and free speech concerns.

On Sept. 25, President Donald Trump signed an executive order clearing the way for the transfer of TikTok’s U.S. operations to an American-heavy consortium, presumably before the congressional divest-or-ban law extension expires in December.

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Congress passed a law forcing TikTok to divest to U.S. ownership or be banned in the country in spring 2024. The law went into effect in January, just hours before Trump was sworn into office, and immediately enacted the first of four legally dubious delays of deadlines to divest. The administration refused to enforce the ban, and TikTok has continued to operate in the U.S.

Reports indicate that under the new deal, the U.S. government will not take an ownership stake or retain a “golden share.” Instead, a newly formed joint venture with a majority of U.S. investors and a U.S.-dominated board of directors will lease and duplicate the platform’s recommendation algorithm.

That algorithm is sometimes referred to as TikTok’s “secret sauce” and is largely responsible for the short video sharing social media platform’s meteoric success among more than 100 million active U.S. users. Cloud and software behemoth Oracle would serve as the app’s “trusted security provider,” overseeing data storage, algorithm oversight, and code review. The new entity would retrain the leased algorithm on American user data under Oracle’s supervision.

The proposed deal marks progress towards fulfilling the letter of the law, but doubts remain.

The $14 billion valuation assigned to TikTok in the deal has sparked criticism for being far below the market value of the platform. Another concern is the lingering sub-20% stake by TikTok’s current owner, Chinese-based ByteDance, and the company’s continued revenue stream from licensing and fees from U.S. operations.

Rep. John Moolenaar (R-MI), the chairman of the House Select Committee on the Chinese Communist Party, announced plans for “full oversight” of the deal and a hearing with the new ownership next year. In a statement, he pointed out that “divestment was not the law’s only requirement.” He continued, “The law also set firm guardrails that prohibit cooperation between ByteDance and any prospective TikTok successor on the all-important recommendation algorithm, as well as preclude operational ties between the new entity and ByteDance.”

Those questions go to the heart of still-unknown details for the transfer of TikTok’s algorithm to a new U.S. entity. If the arrangement is a one-time lease of the technology, it may meet the demands of the law. If, instead, ByteDance stays involved to update or troubleshoot the software, that may present legal problems for the deal.

Supporters of the divest-or-be-banned law pointed to fears over Chinese government influence on what American users are shown, or kept from, on the app. Whether those concerns are sufficiently addressed in the deal remains unknown. But the “intense monitoring” of data flows referenced in the executive order to prevent any Chinese government influence on what the algorithm recommends may raise its own set of problems if the U.S. government begins interfering with those content moderation decisions.

“The arrangement creates uncertainty about what influence or oversight the US government might require over this separate algorithm that could raise potential First Amendment concerns regarding government influence over a private actor,” the Cato Institute’s Jennifer Huddleston said in a statement.

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Longtime followers of the TikTok saga will note that the administration’s latest deal has significant overlap with the January 2024 plan TikTok itself proposed in response to the existential threat of being banned in the U.S. It was called Project Texas, cost TikTok more than $1 billion to create, and was largely ignored by lawmakers, who passed the divest-or-be-banned law 18 months later. With the obvious exception of ownership, Project Texas and what’s so far known about the latest deal have many similarities: a separate TikTok for U.S. users and Oracle acting as the supervisor of data to ensure national security priorities, among them.

As TikTok’s uncertainty in the U.S. drags on, one wonders how far the matter has come from a solution proposed almost two years ago.

Jessica Melugin is the director of the Center for Technology and Innovation at the Competitive Enterprise Institute and a 2025 Innovators Network Foundation antitrust and competition policy fellow.