00:00So as you've said, there's a lot that we don't know. Things are very much in flux. What we do know, what we've heard from the White House as recently as this morning is that there is set to be this new tick tock venture created in the United States. And that Oracle, which Tick Tock has a long standing relationship with, is basically going to be on point to help secure this new U.S. tick tock entity. And they will basically be helping tick tock to retrain its algorithm and also to make sure that U.S. data of people, all the Americans, you know, the roughly half the country using tick tock, that all of it is secured in the United States and is staying here and is not going to be accessible by bytedance's employees in China. So is this a different algorithm than Bytedance's algorithm that has captured the attention of so many? So this is the I would say like the million dollar question and the biggest sticking point and sort of there's even been squabbling today, and I think this will also continue over this algorithm point. The whole sticking point that held up the deal for all this time was the algorithm. This is the secret sauce as this technical black box that is the thing that keeps people hooked and scrolling and scrolling. Bytedance And China did not want to give up any kind of control of the algorithm. The law required exactly that. And so what we what I think we are seeing is the White House really trying to thread the needle and present the agreement that they have reached in a way that makes it seem like that will get everybody comfortable with the level of control that Bytedance may ultimately have over the algorithm. There's talk of licensing the algorithm. The idea is that Bytedance would basically make a copy of it, give that to the United States, and then the United States would retrain it by, you know, TikTok engineers based in the United States would essentially retrain it on U.S. user data. And I think that this again, it's really what could possibly go wrong. It's it's tried it. It's trying to thread the needle on an intensely, enormously complicated issue. And and I think one fascinating thing that came out of a conversation that the White House had with reporters this morning was that the White House is very much downplaying the complexity of the algorithm, saying it's just a mathematical it's just this mathematical thing. And it's not very complex to sort of drill down into the algorithm and sort of wrap your hands around it. And I think I think there's some sort of there's some sort of missing piece here, and there's still some some piece of this that we don't quite understand, because the algorithm that they're downplaying as this sort of easy this easy sort of piece of this is the very thing that had has basically held up tick tock in this limbo for as long as it has. I mean, isn't it net net we're either going to get an algorithm that isn't so cool and not like the original, or we're going to have Chinese engineers or something that actually still are involved. And so the concerns about a potential pass of American data, which have been some of the concerns, could still happen. I don't understand how we're going to make this work. Well, look, there was a there was this thing called Project Texas that that it was it was a team of basically between Oracle and Tech talk years ago to try to solve the national security issues the first time this is back around the time that Trump had tried to ban TikTok over similar, similar national security concerns during his first presidency. Oracle was on deck, as you know, who Trump was saying should should be the one to buy the app if they can make a sale. That ultimately all fell through. But Oracle and tick tock basically you know did this undertaking together called project Texas. It was a multi-billion dollar project that basically saw Oracle trying to help TikTok separate and secure U.S. user data so that it only stayed in the United States. That was basically presented to the and the Biden administration at the time as a solve for all these national security concerns to make the whole problem go away. And talks progressed until they stalled and then they died. And I think a large part of the reason why they died and why Project Texas, this Oracle TikTok team up was not good the first time is because there was no way for there was no way to be able to verify if there was any manipulation going on or if there was any data. There was no there were there were questions about how, you know, if that happened, how would anybody know how it would be, how would the average person, you know, know and also how would the government be able to verify that? But then there were also just like loopholes and shortcomings. It's an incredibly complex setup when you've got, you know, the company here and then you've got Bytedance, which is based in Beijing. And I think that they're trying now to thread the needle. And this this whole proposal is reminding a lot of people who have been following this for years as like it reminds, it's reminding everyone to sort of a project Texas 2.0. But it's not clear that it's not clear that it's necessarily going to solve the problems that it set out to solve. What's what's notable to me about this is that, well, tick tock in the U.S. government have been embroiled in this negotiation or these tensions. Call it what you will. You have companies like YouTube and meta platforms. Creating these clones, or at least ability to actually watch videos on these platforms in a very similar way that grabs attention in a very similar way. It's a long form way of me saying this just sounds like a win for the American rivals. I think that they're watching with bated breath. They're sort of acting like they they're not really paying that close attention. I was just at a YouTube event last week where they were saying that this was not really on their radar. It absolutely is on their radar. But but I think that if Tick Tock is able to continue operating in the U.S., that in some ways will not be a win for the rivals. I think, you know, in some ways, this limbo has been a really good thing for the rivals. You definitely at one point saw an influx of other platforms. You saw the other platforms being able to copy Ticktalk and some of the features that Tick Tock had. How special is this algorithm? Like, how hard is it to actually understand what I like versus what somebody else likes and just show us videos that will get us to keep watching? It doesn't seem that hard. But then again, here I am, a person talking, no offense, not not creating these algorithms. I think that, you know, the like. How special is that special sauce? Is it really? I mean, I think that if you ask anyone that spends time across all these platforms on the platforms, people will have different preferences, right? Some people will be more, you know, more hooked on Tick Tock. Some people will be more hooked on YouTube. I think, though, that the fact that it has been this black box and it has built it has been built up to be this thing that is not for sale and that will never be turned over and that will never be, you know, China will never relinquish control. I think it is added to the sort of mystique and it is also reinforced, really crystallized for some in Washington exactly what the concerns with the algorithm are in the first place. So the main national security concerns, which I feel like get kind of like buried in all of this. Number one, there's exactly there's the concern, number one, that maybe bytedance and and by translation, China could use the app to collect sensitive information about Americans. The other piece of it is all about the algorithm, which is maybe they could use the the they can manipulate the algorithm to push certain divisive narratives on American citizens who are using the app and make people, you know, like just just create discord in the United States and change public discourse. And I think the fact. So like your question is the algorithm that special? I think that just the fact that there's all this that that there's all of these all of these, does the national security concerns go away under this new deal? Who knows? Right. Like, I don't know.

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TikTok’s Algorithm to Be Secured by Oracle Under Trump Deal

Oracle would provide security and help oversee the re-creation of a new US version of TikTok’s algorithm under a deal taking shape to sell the popular Chinese-owned app to a consortium of American investors, a White House official said, addressing a key concern raised by lawmakers in Washington. The arrangement, outlined by the official on Monday, seeks to ensure that the American buyers control TikTok’s recommendation software in the US following a divestiture by its Chinese parent, ByteDance Ltd. Owners of the US-based TikTok would lease a copy of the algorithm from ByteDance that would then be retrained “from the ground up” with Oracle’s oversight, according to the official. Bloomberg News Technology Reporter Alexanda Levine joins Bloomberg Businessweek Daily to discuss. (Source: Bloomberg)