Chinese tech giant ByteDance reportedly wants Oracle and Walmart to pay $12 billion for a combined 20 percent stake in its social media giant TikTok — a plan President Donald Trump endorses, which will allow TikTok to a least temporarily avoid a threatened U.S. shutdown.
“I approved the deal in concept,” Trump told reporters Saturday. “If they get it done, that’s great. If they don’t, that’s OK, too.”
The agreement appears to stave off the Trump administration’s threat to shut down TikTok’s U.S. operations over alleged national security grounds. The administration originally planned to ban the app as of Sunday (Sept. 20), but pushed that to Sept. 27 over the weekend in light of the Oracle/Walmart deal.
The president signed an executive order in August claiming that TikTok, a Chinese-based social media app popular around the world, threatened U.S. security by potentially sharing Americans’ personal information with the Chinese government. TikTok parent ByteDance denied that, but Trump threatened to shut the company’s U.S. arm down unless ByteDance sold at least TikTok’s U.S. operations to an American company.
TikTok last week agreed to make Oracle its “trusted cloud and technology provider, responsible for fully securing our users' data” in America. As part of the deal, it will create a new U.S.-based company called TikTok Global, with published reports saying Oracle and Walmart will own a combined 20 percent of the company. That appears to have satisfied Trump, allowing TikTok to avoid a U.S. shutdown for at least the moment.
Bloomberg News cited unnamed sources Sunday as saying that ByteDance wants Oracle and Walmart to pay $12 billion for their 20 percent stake — 12.5 percent for Oracle and 7.5 percent for Walmart. That values the video-sharing platform at $60 billion in total.
The president said the new company will likely be based in Texas and is expected to hire a workforce of 25,000, including engineers, marketers and content moderators.
Trump also said he wants $5 billion from the companies behind the TikTok deal, which the president wants to use to teach American children “the real history of our country.” However, ByteDance told the media it hadn’t heard of that requirement before.
Sources told Bloomberg the final price, equity stakes and security measures surrounding TikTok Global have yet to be determined. In addition, the Chinese government must also approve the transaction.
ByteDance might end up owning as much as 80 percent of TikTok Global, which would control the app’s operations in America and the rest of the world outside of China. ByteDance would continue to own Douyin, as TikTok is called in China.
Plans call for TikTok Global to also go public within a year.
On Saturday, Oracle CEO Safra Catz said the company will quickly deploy, rapidly scale and operate TikTok systems in the Oracle Cloud.
“We are 100 percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world,” Catz said in a statement. “This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”
Prior to Trump’s comments signaling approval of the deal, TikTok and ByteDance filed their second lawsuit in federal court on Friday to stop the administration from blocking TikTok in America.
The complaint in U.S. District Court in Washington, D.C., argued the Trump administration violated free speech protections with its decision to prohibit the popular short video-sharing app.
TikTok and ByteDance argued in court papers that the Trump administration “took this extraordinary action of prohibiting a popular communication and information-sharing platform without affording its owners … due process of law, and for political reasons rather than because of any ‘unusual and extraordinary threat’ to the United States.”
TikTok and ByteDance last month filed a separate lawsuit in the U.S. District Court for the Southern District of California, where TikTok's American operations are based.
In that action, they argued Trump’s far-reaching order is unconstitutional because it failed to give the company a chance to respond. It also alleged that the administration's national security justification for the order is untrue. No decision has been issued in that case.