Oracle and TikTok had reached a deal over the weekend in which Oracle, together with Walmart, would take over its U.S. operations and own a new company called TikTok Global. Pesident Trump had given his approval to the deal after having the U.S. Commerce Department move to halt its operations over security concerns because TikTok is Chinese owned. But now there is a problem.
Chinese platform Toutiao has discounted the main aspects of the deal. It said that TikTok Global will still be a 100% owned subsidiary of Bytedance that is headquartered in the United States. TikTok Global plans to launch a small round of Pre-IPO financing. After the financing, TikTok Global will become a holding subsidiary of Bytedance which will still hold 80% of the firm.
The board of directors of TikTok Global includes the founder of Bytedance and the current directors of Bytedance, as well as the CEO of Walmart.
To ally the American security concerns, it was said that Oracle would have TikTok’s source code. But ByteDance said in a statement that Oracle would merely be able to review the TikTok source code, not have full access to it or control over it.
Vanessa Pappas, Interim Head of TikTok, has posted an update for the TikTok community.https://t.co/NY5D9eAoLC
— ByteDance (@BytedanceTalk) September 20, 2020
For some reason President Trump said that ByteDance would donate $5 billion to a new fund as part of the deal. The fund would be used, said Trump, to educate Americans about their real history.
But ByteDance refuted this saying, “Some news media reported that TikTok will set up a $5 billion education fund in the United States. We would like to clarify that it was also our first time hearing about the news.” The company said that it does, however, estimate that it will need to pay out about $5 million in U.S. taxes over the next few years.