President Donald Trump said Saturday he’s given his “blessing” to a proposed deal between Oracle and Walmart for the U.S. operations of TikTok, the Chinese-owned app he’s targeted for national security and data privacy concerns.
The proposed deal, which must still formally approved, would create a new company, TikTok Global, headquartered in the U.S. and 20 percent owned by Oracle and Walmart.
“I have given the deal my blessing,” Trump said. “If they get it done, that’s great. If they don’t, that’s OK too.”
Trump has been targeting TikTok, a video app popular with younger people, as well as WeChat, another Chinese-owned app. The dispute over the two apps is the latest flashpoint in the rising tensions between the world’s two largest economies.
Trump’s approval of a deal signals the end of a turbulent few months for TikTok and owner ByteDance as the app faced an uncertain future in the U.S. Though ByteDance is not outright selling TikTok, it is giving up significant control over the fast-growing app’s global business in order to keep it operating in its second largest market. (India was TikTok’s largest international market until the app was banned there in June.)
A TikTok spokeswoman responded to the president’s latest comments with a statement on Saturday afternoon.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok’s future in the US,” the statement reads.
“As part of this proposal, Oracle will become our trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied. We are currently working with Walmart on a commercial partnership as well. Both companies will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company.”
“We will also maintain and expand TikTok Global’s headquarters in the US, while bringing 25,000 jobs across the country,” the statement added. “TikTok has won the hearts of hundreds of millions of people around the world, including 100 million Americans, because it’s a home for entertainment, connection, and expression. We’re delighted that the individuals who’ve turned their creativity on TikTok into thriving careers, the small businesses using TikTok to reach customers during the pandemic, and the families who’ve found joy and connection through our platform will be able to use TikTok for many years to come. Our team works tirelessly to provide a safe and inclusive platform and we’re thrilled that we will be able to continue serving our amazingly diverse and creative community.”
Oracle and Walmart put out their own statement on Saturday night, providing additional details about the deal. TikTok Global would be majority owned by American investors, they said, and four out of five board members would be Americans.
TikTok’s technology would be helped by TikTok Global and would comply with U.S. laws and privacy regulations, the companies added. All American data would be moved to Oracle’s cloud data centers. Walmart, meanwhile, would provide retail capabilities including an e-commerce marketplace, order fulfillment and payment processing.
According to the statement, TikTok Global would add 25,000 jobs in the U.S. and pay more than $5 billion in taxes. The company will also create an educational initiative to offer an online video curriculum to students.
TikTok Global will look to go public within the year and be listed on a U.S. exchange.
The president’s statements follow Friday’s announcement by the U.S. Department of Commerce previously announced that app downloads of TikTok and WeChat would be blocked in the U.S. through an executive order, citing national security and data privacy concerns.
A total ban on the use of TikTok would follow on Nov. 12, but Commerce Secretary Wilbur Ross said Friday on Fox Business News that access to that app may be possible if certain safeguards are put into place. “At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations,” Ross said in a prepared statement.
The government said its order, previously announced by President Donald Trump in August, will “combat China’s malicious collection of American citizens’ personal data.”
The government order raised questions about California tech giant Oracle’s recent deal to take over U.S. operations of TikTok, a requirement by the Trump administration for the app to continue operating in the U.S.
Sep. 19, 5:03 p.m. Updated to include TikTok’s statement on Saturday.
Sept. 1, 8:22 p.m. Updated to include additional details about the deal.