Trump Signs Off on Deal Allowing TikTok to Continue U.S. Operations--6th Update
By Andrew Restuccia, John D. McKinnon and Georgia Wells
WASHINGTON -- President Trump said he has agreed in concept to a
deal under which Chinese-owned video-sharing app TikTok will
partner with Oracle Corp. and Walmart Inc. to become a U.S.-based
company, capping negotiations that have stirred debate over
national security and the future of the internet.
"I have given the deal my blessing, if they get it done that's
OK too, if they don't that's fine too," Mr. Trump told reporters at
the White House on Saturday.
With the announcement of a deal, the Commerce Department said it
would delay a ban on U.S. downloads and updates for the TikTok app
that was set to take effect at 11:59 p.m. Sunday. The ban is now
set to take effect Sept. 27, but could be further delayed or
removed if the proposed new partnership goes forward.
Oracle said in a statement that it would have a 12.5% stake in
the new entity called TikTok Global, and would provide secure cloud
service for data on the popular app.
Walmart said it had agreed to purchase 7.5% of TikTok Global as
well as entering into commercial agreements to provide ecommerce,
fulfillment, payments and other services to the new company.
TikTok's current owner, Beijing-based ByteDance Ltd., would
retain roughly 80% ownership of the company, according to people
familiar with the situation. But because ByteDance is about 40%
owned by U.S. investors, the new company with equity stakes for
Oracle and Walmart can be described as having majority American
ownership, they said.
"We are a hundred percent confident in our ability to deliver a
highly secure environment to TikTok and ensure data privacy to
TikTok's American users, and users throughout the world," Oracle
Chief Executive Safra Catz said in a statement.
Walmart said its CEO Doug McMillon would serve as one of five
board members of the newly created company.
"In addition, we would work toward an initial public offering of
the company in the United States within the next year to bring even
more ownership to American citizens," Walmart said. "This
partnership will provide Walmart with an important way for us to
expand our reach."
A TikTok spokeswoman said the company was "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," she said.
Backers of the new company were working against a deadline of
11:59 p.m. Sunday, when the U.S. had planned to ban U.S. companies
from providing downloads or updates for TikTok.
The president said the agreement will result in the creation of
25,000 jobs, mostly in Texas, adding that the new company will
still be called TikTok and "will have nothing to do with
He added that Oracle and Walmart are planning to set up a $5
billion fund for the education of young Americans. He didn't offer
The negotiations over TikTok's U.S. operations began after the
president signed an executive order in August that labeled TikTok a
national-security threat, on grounds that data the app collects on
American users could be shared with the Chinese government. TikTok
denied that could happen.
Oracle beat out several other companies that had expressed
interest in TikTok, including Microsoft Corp. and Twitter Inc.
Aaron Tilley and Sarah Nassauer contributed to this article
Write to Andrew Restuccia at Andrew.Restuccia@wsj.com, John D.
McKinnon at email@example.com and Georgia Wells at
(END) Dow Jones Newswires
September 19, 2020 22:00 ET (02:00 GMT)
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