U.S. Treasury Secretary Steven Mnuchin declined to provide much detail on Oracle Corp.’s winning bid for TikTok’s U.S. operations.
The secretary failed to answer questions about the terms of the Sunday (Sept. 13) deal on CNBC’s “Squawk Box” Monday (Sept. 14).
“I want to be careful what I say,” Mnuchin said. “But I will confirm we did get a proposal over the weekend that includes Oracle as the trusted technology partner …”
He said Oracle has made “many representations for national security issues” and committed to creating TikTok Global, a U.S.-based company with 20,000 new jobs.
“I’m not going to go into the entire proposal,” he said. “We will be reviewing that at the CFIUS committee this week and then we will make a recommendation to the president.”
CFIUS is the Committee on Foreign Investment in the U.S., an interagency committee authorized to review foreign transactions to determine the impact it might have on national security.
The Treasury Department said it plans to review the Oracle-TikTok deal with an eye toward avoiding a ban of the popular video-sharing app because of its Chinese ownership, The Wall Street Journal reported.
While details of the transaction were not disclosed, the WSJ reported it is likely to involve moving TikTok’s data on American users to Oracle’s cloud-computing platform.
Over the weekend, The Wall Street Journal reported ByteDance, the Chinese owner of the video sharing app, chose the Redwood City, California-based global software computer technology corporation to be TikTok’s U.S. technology partner.
But Mnuchin sidestepped questions about why Oracle will hold a minority interest as “tech partner” instead of full control that a sale would bring.
“How can that be and is TikTok still a national security threat?” CNBC asked.
“I don’t want to go into the details of the negotiations,” Mnuchin said. “I would say there has always been a critical factor for us driving national security is making sure the technology on American’s phones are safe and make sure that it is not corrupt.”
Mnuchin also would not answer a question about TikTok’s algorithm, which appeared to be the central issue in terms of what the Chinese government will provide to a U.S. firm.
Last week, ByteDance said it won’t sell its essential algorithm for the video-sharing app, according to sources quoted by the South China Morning Post. The programming code is at the heart of the app which decides what content gets shown to who.
“I would just say ... we will need to make sure that the code that is secure, American’s data is secure, that the phones are secure,” Mnuchin said. “We will be looking to have discussions with Oracle over the next few days with our technical teams.”
Trump issued an executive order on Aug. 6 prohibiting American companies from conducting business with ByteDance over fears the Chinese company would share private information about American users to the government. The president ordered the sale of its California’s headquarters to a U.S. company by Sept. 20.
A Chinese Commerce Ministry spokesperson told reporters at a press conference that the claims are without merit.