Tech giant Oracle’s plan to save TikTok is hitting a formidable roadblock: US Sen. Tom Cotton.
The conservative heavyweight from Arkansas has made it clear to Team Trump he will oppose any deal that doesn’t comply with bipartisan US legislation calling for TikTok to be completely divested from its Chinese control and ownership, according to three people with direct knowledge of the matter.
Cotton has made no public comments on the current state of discussions to save TikTok from a congressionally ordered sale or ban. But sources close to him tell The Post that he’s recently asked about the status of the talks and has had conversations with the White House about the matter.
Cotton’s potential opposition could nix a much-discussed TikTok-Oracle deal to house user data from the popular short-video app on Oracle servers. For now, TikTok’s China-based parent company Bytedance still owns the algorithm. Oracle and TikTok executives have argued that since the algo will be located inside Oracle’s cloud, it would be the US tech giant, and not the Chinese, who are in control of it.
Yet skepticism remains from key lawmakers like Cotton and others. That pushback has also caused White House officials to weigh other remedies to keep the app from being banned in the US, these people say.
President Trump — who ironically pushed for a ban in his first term over spying concerns – lately has a soft spot for the app. He credits TikTok with helping him win the 2024 presidential election as pro-Trump videos circulated throughout the campaign.
Once in office, he issued an executive order giving a 75-day reprieve from the law, allowing TikTok to find a deal partner before the ban can take effect. The suspension of the ban ends on April 5, and it’s unclear if Trump will issue another executive order until a deal can be made.
Trump has long argued that Oracle – co-founded by his close friend Larry Ellison, the Silicon Valley billionaire – should be at the center of any deal involving TikTok.
One of the problems with crafting any deal is, of course, getting sign off from the Chinese government, which plays a substantial role in the operations of all Chinese companies, even those with publicly traded stocks in the US. People close to the negotiations say Trump might have to negotiate directly with Chinese President Xi Jinping to make it happen. Beijing has made it clear so far in the negotiations that it is unwilling to part with TikTok’s algorithm.
As I first reported on March 7, the deal on the table would involve some sort of “licensing agreement” between Oracle and ByteDance, people familiar with the matter said. It would include taking control of TikTok’s US operations, storing and safeguarding the user data. ByteDance would still own the algorithm – meaning, critics contend, the Chinese Communist Party would still be at least in theory in control of the product and could tap into user data for spying purposes, a charge TikTok has long denied.
Critics say the transaction appears to fall outside the strictures of the legislation known as the No TikTok on Government Devices Act, which was signed by law in 2022 by President Biden, and after a lengthy court battle, upheld by the Supreme Court days before Trump took office.
Now, White House aides are debating whether TikTok is worth a brutal battle to save it if the Chinese don’t want to relinquish total control, people with direct knowledge of the matter say.
“I know Trump likes the app, he thinks it helped him win in November, but with everything else on his plate, is it worth saving? That’s one conversation that they’re having in the White House,” said one person involved in the negotiations.
A spokesman for Cotton had no comment. A person close to him tells On The Money “If this deal doesn’t comply with the law, he’s absolutely against it, but it’s too soon to say what the substance of the deal will be.”
A White House spokesman had no immediate comment. A spokesman for TikTok had no comment. A spokesman for Oracle had no immediate comment.
Amid the flurry of talks, Cotton has made one thing clear, these people say: He wants whatever deal to comport with congressional legislation that “precludes the establishment or maintenance of any operational relationship between the United States operations and any formerly affiliated entities that are controlled by a foreign adversary.”
Oracle and the White House could make the case that by keeping the algorithm in its cloud, and with additional safeguards, the Chinese would not “control” it any longer.
Cotton, a ranking Republican on the Senate Intelligence Committee, is said to be skeptical of this approach, and would like the new owners of the company to either create their own algorithm or buy the existing one from the Chinese.
He has long been a critic of TikTok, raising national security concerns that the Communist Chinese regime, which has control over China Inc., has access to user data for spy craft purposes. Another concern is that the all-important algorithm pushes anti-US propaganda to its 170 million US users, largely comprised of children and young adults.
But since the early days of the China-TikTok divestiture talks about five years ago, Chinese government officials have made it clear that they were not willing to part with TikTok’s so-called secret sauce, its algorithm that enhances user engagement by feeding video to users based on various metrics.
Since then, TikTok has moved its US user data to be stored in the Oracle cloud, something known as “Project Texas” because it’s where the tech giant is headquartered. It has hired lobbyists to make its case to Congress that it doesn’t siphon user data for spying purposes.
The new licensing deal would presumably include additional safeguards to prevent any backdoor attempt by the Chinese to gain access to it, but many GOP lawmakers and China hawks like Cotton still need to be swayed. Another issue: Potential liability of any deal that doesn’t meet the law’s strict standards involving Chinese control or ownership of the algorithm.
People with knowledge of the Oracle-White House discussions say any deal that falls short of what the law stipulates about a clean break from China could be subject to litigation, including from Democrats state attorneys general, meaning Oracle might need to be indemnified by the White House.
