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Teenagers check their phones in front of a TikTok logo in Los Angeles on Sept. 11, amid ongoing U.S.-China negotiations over the app’s future. / Source: Reuters, Yonhap News

China has signaled that any sale of TikTok’s U.S. operations would still allow the platform to use its powerful recommendation algorithm, a stance that could undercut U.S. national security assurances, the Financial Times reported Tuesday.

At a press briefing, Wang Jingtao, deputy director of China’s Cyberspace Administration, said Beijing and Washington reached a framework agreement during two days of high-level trade talks in Madrid that included “licensing of algorithms and other intellectual property.” He added that TikTok’s parent, ByteDance, would entrust the management of U.S. user data and content security to American partners.

The algorithm — the core technology behind TikTok’s addictive video feed — remains under China’s export controls and is seen by U.S. officials as a tool that could be manipulated to spread propaganda or harmful content. The Trump administration has demanded that any deal include a full separation of the algorithm from ByteDance.

“China’s bottom line is a licensing arrangement,” one Asia-based investor in ByteDance told the FT. “Beijing wants it to be seen as exporting Chinese technology to the U.S. and the world.”

Still, the extent of ByteDance’s retained influence through such a licensing deal remains unclear. Analysts warn that even if Oracle — widely expected to be the buyer — provides cloud services to store TikTok’s U.S. data, it may not fully resolve concerns over Beijing’s potential sway.