By Kate Davidson, Georgia Wells and Michael C. Bender
China's ByteDance Ltd. would retain a majority ownership stake in its TikTok app unit as part of a proposal being reviewed by national-security regulators, with an eye toward settling the high-profile deal by a deadline Sunday, according to a person familiar with the situation.
The proposal includes Oracle Corp.'s bid to become TikTok's U.S. technology partner as part of an effort to address the administration's national-security concerns surrounding the Chinese-owned video-sharing app.
The Committee on Foreign Investment in the U.S., which includes officials from the Treasury, State, Commerce and other departments, reviewed the deal late Tuesday afternoon but didn't make a recommendation, according to an official familiar with the matter.
The deal would make Oracle the U.S. technology partner of TikTok, while allowing TikTok's parent company, Beijing-based ByteDance Ltd., to retain a majority ownership stake, according to the person familiar with the deal. TikTok's global business would also become a company based in the U.S. that will remain a unit of ByteDance, the person said, adding that Oracle would take a minority stake in that company.
President Trump told reporters at the White House earlier Tuesday that his administration would make a decision on the pending deal "pretty soon," adding that he has "high respect" for Oracle Chairman Larry Ellison.
"I heard they're very close to a deal," Mr. Trump said without elaborating.
Mr. Trump spoke by phone on Tuesday with Oracle CEO Safra Catz about the company's plans to revamp TikTok's U.S. operations, according to people familiar with the matter. Ms. Catz was seen at a White House event earlier Tuesday in which the president touted a Middle East peace agreement between Israel and two Gulf nations.
In an August executive order, the White House effectively gave ByteDance a 45-day deadline to sell its U.S. TikTok operations or face a ban. The administration contends that the app poses a security threat because the data TikTok collects from U.S. consumers could be shared with the Chinese government. TikTok has said it would never hand over such data.
TikTok said Monday it thinks its proposal submitted to the Treasury Department "would resolve the Administration's security concerns."
Mr. Trump took an interest in the social-media company weeks ago, but his involvement has lessened as his reelection campaign has become a bigger focus.
Treasury Secretary Steven Mnuchin has been the driving force inside the administration to find a deal that keeps TikTok in operation in the U.S., while Mr. Trump was initially inclined to ban the company. He agreed to let the company find a U.S.-based buyer, saying he wanted a portion of the proceeds to end up in the U.S. treasury.
Another person familiar with the talks said Mr. Trump's concern would be addressed by pointing to the estimated 25,000 U.S.-based jobs the deal may create, and the amount of potential tax revenue the new company would generate in future years.
White House officials declined to say which way Mr. Trump was leaning on Tuesday.
But people involved in the negotiations said Oracle had as good of a shot as any at convincing the president that it could be trusted to address the national security concerns that have been raised by the president, his administration and Republicans in Congress.
Peter Navarro, one of Mr. Trump's top trade advisers, has been pushing to ban TikTok. But in an interview on Fox News on Aug. 26, Mr. Navarro criticized Microsoft's deals in China, while praising Oracle. "Oracle, on the other hand, has a strong reputation of really putting a great firewall between its operations in China," he said.
Mr. Trump has been in regular contact during his presidency with Oracle's Ms. Catz, and he has openly praised Mr. Ellison, one of the few top technology executives supportive of the president.
"If Mnuchin, and Larry Ellison, and Safra can't convince the big guy on this, no one is going to convince him," a person familiar with the talks said.
Mr. Trump issued a separate executive order in August that banned U.S. individuals and firms from transactions involving WeChat, the popular Chinese app owned by Tencent Holdings Ltd. that combines text messages, mobile payments, social media and other functions.
The proposed ban has rattled American companies doing business in China, who worry it could disrupt their marketing campaigns and other operations in the world's second-largest economy.
The precise outline of the WeChat ban isn't clear, however, with Mr. Trump directing the Commerce Department to come up with specific details by Sunday.
In an interview last week, Secretary of Commerce Wilbur Ross said his department would meet that deadline and would publish rules detailing the specific transactions that would be prohibited.
Andrew Restuccia and John D. McKinnon contributed to this article.
Write to Kate Davidson at firstname.lastname@example.org, Georgia Wells at Georgia.Wells@wsj.com and Michael C. Bender at Mike.Bender@wsj.com