U.S. President Donald Trump said on Saturday he supported a deal in principle that would allow TikTok to continue to operate in the United States, even as it appeared to conflict with his earlier order for China’s ByteDance to divest the video app.
ByteDance was racing to avoid a crackdown on TikTok after the U.S. Commerce Department said on Friday it would block new downloads and updates to the app come Sunday. U.S. officials had expressed concern that the personal data of as many as 100 million Americans that use the app were being passed on to China’s Communist Party government.
Trump signed an executive order on Aug. 14 giving ByteDance 90 days to sell TikTok. The deal announced on Saturday, however, is structured as a partnership rather than a divestment.
TikTok will be owned by a new company called TikTok Global and will be headquartered in the United States, possibly in Texas, Trump said. Oracle Corp will take a 12.5 per cent stake in TikTok Global and store all its U.S. user data on its cloud to comply with U.S. national security requirements, the companies said. Retail giant Walmart said it would take a 7.5 per cent stake in TikTok Global. The implied valuation for TikTok Global as a result of these investments could not be learned.
While Oracle and Walmart said that TikTok Global will be majority-owned by U.S. investors, this is the case only if one takes into account ByteDance’s investor base, according to a source familiar with the matter who requested anonymity to discuss the deal’s structure. This is because ByteDance will own 80 per cent of TikTok Global, the source said.