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ByteDance agreed to list TikTok on a US stock market sometime after its proposed partnership agreement with US software group Oracle, as part of its effort to satisfy the Trump administration’s national security concerns with the video sharing app.
People with direct knowledge of the matter said that an IPO in the US, and not China or Hong Kong, was one of several commitments made by the Chinese owner of TikTok to avoid banning the video-sharing app. In the USA.
The Trump administration was reviewing the proposals Thursday, and a deadline was looming for the app’s U.S. operations to be sold to a U.S. company, according to an executive order from President Donald Trump. Oracle would take a minority stake in TikTok under the proposals, and ByteDance would retain majority ownership.
A TikTok IPO had been included in the original plan that the companies provided to the US government over the weekend, according to people briefed on the proposal. One person said inclusion on the list could happen within a year.
ByteDance and Oracle have made a series of concessions to address national security fears raised by the Trump administration, which says the Chinese government has access to data on American TikTok users.
The grants include the creation of TikTok as a US-based company whose board members would all be US citizens, according to people familiar with the deal. The TikTok board would also include a security committee led by a person with government security clearance, these people added.
The US administration would have to approve both the board members and the head of the security committee.
Kevin Systrom, the founder of Instagram, has emerged as a candidate to lead the restructured TikTok. The company is in preliminary discussions with Systrom about the CEO role following Kevin Mayer’s unexpected departure last month, according to a person familiar with the situation.
Systrom sold Instagram to Facebook in 2012 and resigned six years later after clashing with Mark Zuckerberg over reducing the app’s autonomy from its larger parent. His discussions with TikTok were first reported by the New York Times.
In the proposed deal to the US government, ByteDance would retain control of the TikTok algorithm, the critical part of the app that determines which videos users watch first and has been the main driver of its huge success around the world. but Oracle would process the data. from US users and would have to verify any algorithm changes before it is instituted.
As part of ByteDance’s current proposal, which has been back and forth with the Committee on Foreign Investment in the US, a panel within the agency that can block deals on national security grounds, Oracle and Walmart would own the 20 percent of TikTok’s global business. .
ByteDance, which already includes several US investors such as private equity group General Atlantic and venture capital fund Sequoia, would retain the overwhelming majority of TikTok. It is unclear if ByteDance would sell part of its stake in a future initial public offering.
Trump and key members of his administration remain concerned about the feasibility of the proposal, based on public comments in the past 24 hours.
Mark Meadows, the White House chief of staff, said Thursday that “if all we are doing is repackaging it and continue to maintain it as a predominantly Chinese government-run company, that would not dovetail well with the original goal the president set out.” .
Trump was unclear on Wednesday whether he would allow ByteDance to retain a majority stake in the new company. When asked if he would accept such an arrangement, Trump said: “If that’s the case, I am not going to be happy.”
ByteDance’s decision to maintain full control of its algorithm has sounded alarms on Capitol Hill, where Marco Rubio, who heads the Senate intelligence committee, and other Republicans have urged Trump not to approve the existing deal.
“We continue to oppose any agreement that allows China-based or controlled entities to retain, control or modify the code or algorithms that operate any US-based version of TikTok,” Rubio and several of his Republican peers wrote on Wednesday. the Senate. Steven Mnuchin, the Secretary of the Treasury who presides over Cfius.
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