US President Donald Trump threatened that the proposed deal for TikTok — which involves the creation of a new US-based company, TikTok Global — will not be approved if TikTok’s Beijing-based parent ByteDance retains control of the company. “Everything is going to be moved into a cloud done by Oracle, it’s all through the cloud. And it’s going to be 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 told Fox News. He had earlier given his “blessing” to the deal and had “approved the deal in concept.”
Trump’s statement came after ByteDance, in a blog post on Monday, said that it will own 80% of TikTok Global, with Oracle and Walmart sharing the remaining 20%. The company also said that the board of TikTok Global will include ByteDance founder Zhang Yiming, current directors of the company, and Walmart CEO Doug McMillon. The company didn’t specify whether a representative of Oracle will be on the board of directors of TikTok Global.
ByteDance also clarified that the current deal with Oracle and Walmart does not involve the transfer of TikTok’s algorithms and technologies. It said that Oracle only has the authority to check the source code for TikTok USA.
Following ByteDance’s clarification, Oracle hit out at the company, claiming that ByteDance will have no ownership of TikTok Global. “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 said in a statement to Forbes.
The deal, and its future is getting murkier, as the fresh clarifications made by Trump and Oracle are significantly different to the ownership structure announced by ByteDance. Last week, ByteDance announced that Oracle and Walmart will acquire a 20% stake in TikTok’s global business as part of a pre-IPO financing round. Oracle will acquire 12.5% of the short video app, whereas Walmart will pick up a 7.5% stake. As part of the deal, Oracle will become TikTok’s “secure cloud provider”. Oracle also said it will combine its secure cloud technology with “continuous code reviews, monitoring, and auditing” to keep US users’ data safe. Walmart on the other hand is looking to boost its marketplace and ad business through the deal.
The US’ Commerce Department had said on Friday that WeChat and TikTok downloads in the US will be prohibited from app stores. Even American users who already have WeChat installed can no longer use the app to make or receive payments as of September 20, however, that was until a US judge blocked the ban on WeChat. For TikTok, this condition has been delayed until November 12, presumably to accommodate the stake purchased by Oracle and Walmart. This suggests that the app will continue working for users who already have it installed before September 20.