President Trump says he approved “in concept” a deal to allow TikTok to continue operating in the United States, in which it would partner with Oracle and Walmart to become a U.S.-based company.
“I have given the deal my blessing. If they get it done that’s OK too, if they don’t that’s fine too,” Trump told reporters at the White House on Saturday, according to the Wall Street Journal.
The U.S. Department of Commerce previously announced that through Trump’s executive order, downloads of TikTok and WeChat, another Chinese-owned company, would be blocked in the U.S., declaring them a national security threat. He had demanded that the company be sold to a U.S. based company or be shut down.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. Administration and settle questions around TikTok’s future in the U.S.,” TikTok said in a statement following the news Saturday.
The company added that Oracle will become the technology provider for TikTok, which includes securing U.S. user data and meeting national security requirements, and that both Oracle and Walmart can take up to a 20% cumulative stake in the company in a pre-IPO financing round. Oracle said in a separate statement (via AP) that it would take a 12.5% stake in TikTok Global.
This however goes against a comment Trump made earlier in the day claiming that TikTok would be “totally controlled” by both Oracle and Walmart. He further claimed at a rally in North Carolina Saturday that the two companies would be donating $5 billion into a fund for education as to teaching people the “real history of our country, not the fake history,” however there have been no other details on that claim.
TikTok’s Chinese parent company, ByteDance, must now sign off on the deal before anything goes forward, and it would still need approval from both Chinese authorities and the Treasury Department-led Committee on Foreign Investment.
Oracle had taken the lead in the acquisition for a proposed deal of $20 billion in cash and stock at the end of August, TheWrap previously reported.
After the Department of Commerce announced that new downloads of TikTok would be blocked, the company filed a last-minute lawsuit on Friday night in Washington D.C. federal court in an attempt to block the executive order.
“We disagree with the decision from the Commerce Department, and are disappointed that it stands to block new app downloads from Sunday and ban use of the TikTok app in the US from November 12,” TikTok said in a statement Friday. “Our community of 100 million US users love TikTok because it’s a home for entertainment, self-expression, and connection, and we’re committed to protecting their privacy and safety as we continue working to bring joy to families and meaningful careers to those who create on our platform.”
See TikTok’s full statement below:
— TikTokComms (@TikTokComms) September 19, 2020