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NEW YORK: China’s ByteDance said on Monday (Sept. 21) that TikTok’s global business will become its subsidiary, even as Oracle and Walmart said over the weekend that they and U.S. investors would own most of the TikTok app. video after a deal with US President Donald Trump’s administration.
Trump signed an executive order on August 14 giving ByteDance 90 days to sell TikTok, amid concerns that the personal data of up to 100 million Americans using the app could be passed on to the Communist Party of China government.
On Saturday, he said he supported an agreement in principle that would allow TikTok to continue operating in the United States.
Versions of the deal differ. ByteDance said on Monday that it will own 80 percent of TikTok Global, a start-up US company that will own the majority of the app’s operations around the world.
Oracle and Walmart, which agreed to take TikTok Global stakes of 12.5% and 7.5% respectively, said Saturday that majority ownership of TikTok would be in US hands.
ByteDance in its statement on Monday said it was a “rumor” that US investors would be the majority owners of TikTok Global and that ByteDance would lose control of TikTok.
Oracle declined to comment on ByteDance’s statement, while Walmart did not respond to a request for comment.
Some sources close to the deal have tried to reconcile the discrepancy by pointing out that 41 percent of ByteDance is owned by US investors, so by counting this indirect ownership, TikTok Global would be majority owned by US parties. One of the sources said that the deal with Oracle and Walmart values TikTok Global at more than $ 50 billion.
READ: ‘Bored by all this drama’ – TikTok users take it easy on the latest US ban threat.
TIKTOK GLOBAL WILL BE PUBLIC
TikTok also confirmed plans for an initial public offering for TikTok Global.
The Beijing-based firm said TikTok Global’s board of directors will include ByteDance founder Zhang Yiming, as well as Walmart CEO Doug McMillon and current ByteDance directors. The company declined to comment further on who else would be among the directors.
Oracle and Walmart said in a joint statement Saturday that four of the five boards of directors will be American.
The current plan for TikTok Global does not involve any transfer of algorithms or technologies, and Oracle will be able to inspect the source code of TikTok US, ByteDance said. This is similar to American companies like Microsoft sharing their source code with Chinese tech experts, ByteDance added. Oracle and Walmart have said that all of TikTok’s technology will be in the possession of TikTok Global.
ByteDance also said that a payment of $ 5 billion in taxes that TikTok Global is supposed to pay to the US Treasury is based on estimated income and other taxes that the company will have to pay in the next few years and does not have nothing to do with the agreement reached. Oracle and Walmart.
Trump had said last week that there would be a $ 5 billion US education fund as part of the deal, but ByteDance has said it was not aware of this.
READ: TikTok faces another test: its first US presidential election.
ByteDance, which owns the majority of TikTok Global and the algorithms, means ByteDance is “not out of the game” and has avoided the worst case scenario, the Chinese state newspaper Global Times said in an editorial published Sunday.
Shen Yi, a professor at Fudan University, said in a separate article published in the Global Times on Monday that Trump’s assent to the deal “could even be seen as a reversal of the executive order issued by US President Donald Trump. in August “and that was helped. by a “concerted effort” of the Chinese government, ByteDance, and internal US forces.
“If the Trump administration takes more steps to block the deal, it may find direct checks and balances from Wall Street interest groups.”
