China’s ByteDance said TikTok’s global business would become its subsidiary, even as Oracle and Walmart announced that they and US investors will own much of the video app following a deal with the US administration.
On August 14, Trump signed an executive order allowing 90 days to ByteDance to sell TikTok, amidst fears that the personal data of as many as 100 million Americans using the app might be passed on to the government of the Communist Party of China. He recently said that he favored an arrangement that would allow TikTok to continue operating in the United States.
Differing details
The deal’s accounts vary. ByteDance said today that it will own 80 percent of TikTok Global, a newly formed US company that will own most of the worldwide operations of the app. Meanwhile Oracle and Walmart, who agreed to take stakes of 12.5 percent and 7.5 percent respectively in TikTok Global, had said on Saturday that the majority ownership of TikTok will remain in American hands.
In its statement, ByteDance said that it was a “rumor” that US investors would be the majority owners of TikTok Global and that ByteDance would lose control over TikTok. Walmart and Oracle both declined to comment on this most recent statement made by ByteDance.
By pointing out that 41 percent of ByteDance is owned by US investors, some sources close to the deal try to resolve this difference. They say that when counting this indirect stake, TikTok Global will be majority owned by US parties.
Sources suggest that the deal with Oracle and Walmart values TikTok Global at more than $50 billion. The popular video app also announced plans for an initial offering for TikTok Global. The Beijing based company said the board of directors of TikTok Global would include ByteDance founder Zhang Yiming as well as Walmart’s chief executive Doug McMillon and current ByteDance directors. More information on the other directors are yet to be revealed.
In a joint statement on Saturday, Oracle and Walmart said four out of the five board of directors would be Americans.
There is no transfer of algorithms or technology in the current plan for TikTok Global but Oracle will be able to inspect the source code of TikTok US, ByteDance said. This is similar to how the source codes are shared with Chinese technology experts by US companies like Microsoft Corp, ByteDance added. Oracle and Walmart had also clarified that all of the TikTok technologies will remain in TikTok Global’s hands itself.
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