(Updates with additional details throughout.)

Oracle (ORCL) is considering a proposal for the sale of TikTok's US operations under which it would provide security guarantees for the safety of US user data while taking a "small stake" in a new American entity, Bloomberg reported Tuesday, citing people familiar with the situation.

The proposal seeks to mitigate national security risks by safeguarding US user data and preventing potential backdoor access by the Chinese government, the people told Bloomberg. The plan was circulated within the Trump administration last week, less than three weeks before a TikTok ban is enforced unless TikTok's parent ByteDance divests its US operations.

Oracle already collaborates with TikTok on data security through "Project Texas" and the impact of the new proposal on the app's operations and its ties to ByteDance remain unclear, the people told Bloomberg, adding that the proposal remains tentative, with details subject to change.

Any deal requires approval from the US and Chinese governments, as well as from ByteDance. Keeping the algorithm under Chinese control could facilitate approval in Beijing but may not address US security concerns or comply with existing laws, Bloomberg said.

Representatives from Oracle, the White House and ByteDance did not respond to Bloomberg's requests for comments, while TikTok declined, the report said.

Oracle, TikTok, the White House, and ByteDance didn't immediately respond to a request for comment from MT Newswires.

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