TikTok’s Future in the US Hinges on Algorithm Dispute in Washington-Beijing Deal

TikTok’s future in the United States is once again uncertain, with its powerful algorithm at the center of a high-stakes geopolitical showdown. The short-video app, which boasts nearly 170 million American users, now depends on a potential framework deal between Washington and Beijing.

President Donald Trump has made it clear: ByteDance, TikTok’s Chinese parent company, must restructure its American operations under predominantly US ownership. But the real challenge lies in determining who controls TikTok’s “secret sauce” — the algorithm that drives its wildly successful recommendation feed. While the US government demands greater oversight, China has declared the algorithm as sensitive intellectual property, making it non-transferable.

Here are the key developments in five points:

1. Framework Deal Between US and ChinaAfter recent trade talks in Madrid, US Treasury Secretary Scott Bessent confirmed that both nations have reached a basic framework to restructure TikTok’s American arm. According to reports, this plan involves spinning off TikTok’s US business into a new company, mostly American-owned. China’s international trade representative Li Chenggang also stressed the importance of economic cooperation, signaling both sides want a political and diplomatic win. President Trump has extended the ban deadline to December 16, 2025, giving negotiators a narrow window to finalize terms.

2. Who Will Own TikTok in the US?While ownership details are still being negotiated, reports suggest a consortium of American investors will likely control around 80 percent of TikTok’s US entity. Big names in the mix include Oracle, private-equity powerhouse Silver Lake, and venture capital giant Andreessen Horowitz. Oracle, which already manages TikTok’s US user data, is expected to play a crucial role in server management and possibly day-to-day operations. The plan would ensure the board of TikTok US is primarily controlled by American stakeholders, with potential government oversight.

3. The Algorithm QuestionThe most contentious issue remains TikTok’s algorithm — the recommendation engine that decides what users see. US lawmakers argue that as long as ByteDance retains ownership, American users’ data and moderation could be compromised. China, however, insists the algorithm cannot be sold under its export and cybersecurity laws. A possible compromise being discussed is licensing the technology to the US spin-off. This would allow TikTok’s American version to use a licensed copy, retrained specifically on US data, while ByteDance keeps ownership rights.

4. The Political and Security DebateWashington insists any final deal must satisfy US national security requirements. Lawmakers from the House Select Committee on China maintain that sharing the algorithm with ByteDance is unacceptable. Meanwhile, Beijing warns that any transfer of core technology must comply with its strict regulations. These competing red lines are making negotiations highly complex, leaving the deal’s outcome uncertain.

5. What’s Next for TikTok Users?President Trump is expected to discuss the final contours of the agreement with Chinese President Xi Jinping later this week. With the December 16 deadline looming, both sides face pressure to strike a deal that satisfies political, economic, and security concerns. For now, TikTok’s 170 million American users continue scrolling — waiting to see if the app’s fate will be decided in Washington, Beijing, or the courtroom.