The Trump administration on Friday sought to ban downloads of WeChat and ByteDance-owned TikTok from operating in the United States, starting Sunday, over alleged national security concerns. But the deal between TikTok owner ByteDance and Oracle/Walmart was approved on Saturday by President Trump which allows the TikTok app to operate as normal for now.
“I have given the deal my blessing — if they get it done that’s great, if they don’t that’s okay too,” Trump told reporters on the White House South Lawn before departing for North Carolina. “I approved the deal in concept.”
This blessing according to the president would see Oracle and Walmart take a minority stake in a U.S.-headquartered company called TikTok Global. Oracle would become the secure cloud provider and host American users’ data in the country.
“It’ll be a brand new company. It will have nothing to do with any outside land, any outside country, it will have nothing to do with China,” Trump said.
However, contrary to this statement, on Monday Beijing-based ByteDance said it would own a majority stake in the new TikTok Global in the U.S., appearing to contradict President Donald Trump’s claims the deal has “nothing to do with China.”
The Beijing-based parent company of TikTok, insisted it was not losing control of the social media app. It claimed his deal for Oracle will be TikTok’s secure cloud provider and will be a minority investor with a 12.5% stake. Walmart tentatively agreed to purchase a 7.5% stake in the short-form video social media app. TikTok’s Chinese parent company ByteDance will own the remaining 80% of TikTok Global. Oracle will also get to inspect the source code for TikTok, but ByteDance said it will not be transferring algorithms or technology to the U.S. firm.
As a response to this claim, Speaking to Fox News on Monday, Trump said ByteDance will “have nothing to do with it, and if they do, we just won’t make the deal. It’s going to be controlled, totally controlled by Oracle… and if we find that they don’t have total control then we’re not going to approve the deal.”
Trump indicated that any Chinese control of TikTok Global will be diluted by a future public offering of the new company, stating that “I guess they’re going public and they’re (Oracle) buying out the rest of it, they’re buying out a lot.”
“They are going to buy it,” he said, referring to Oracle and Walmart. “They’re going to have total control over it. They’re going to own the controlling interest. And if we find that they don’t have total control, then we’re not going to approve the deal.” “It’s all going to be run by Walmart — 100 percent — and Oracle,” he added.
Oracle — which was founded by billionaire Trump supporter Larry Ellison — doubled down Monday on its assertion that Americans would control TikTok Global, saying ByteDance would not have sway over the new entity.
“Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global,” Oracle executive vice president Ken Glueck said in a statement.
Shortly after Trump’s comments, Hu Xijin, editor-in-chief of the China state-affiliated Global Times, tweeted that Beijing would likely reject the deal “because the agreement would endanger China’s national security, interests and dignity.”
The rapid-fire comments from both sides reflected the critical stage the deal has entered to hash out an agreement that would keep both Washington and Beijing happy, a likely delicate balance.
The Trump administration requires the US operations of TikTok, which has more than 100 million US users, to be owned by an American owner to protect sensitive data for national security reasons. However, China has recently updated its tech export control rules that require no Chinese technologies will be sold without government intervention and approval.