Except that this story reveals the obvious reason this wouldn't work. How do you reliably keep that US "arm" from being co-opted? How do you make sure that the software isn't phoning home to China regardless of what the US arm does?

Oracle and Walmart reportedly at that time brokered a deal to run the US arm of TikTok. Do you trust them? Walmart certainly isn't politically neutral, by any stretch. Meanwhile, Larry Ellison was a leading figure in the effort to subvert the 2020 election. He was on the Nov. 14 election subversion planning call, along with "Sen. Lindsey O. Graham (R-S.C.); Fox News host Sean Hannity; Jay Sekulow, an attorney for President Donald Trump; and James Bopp Jr., an attorney for True the Vote, a Texas-based nonprofit that has promoted disputed claims of widespread voter fraud." (source: WaPo)

This doesn't seem like a solid plan, to put it rather mildly.