US President Donald Trump said he would rescind his approval of TikTok’s deal with Oracle and Walmart if ByteDance retains control of TikTok. However, he also indicated that he expected Chinese influence to be diluted by a future public offering of the new company. Shortly after Trump’s comments, State-backed Chinese newspaper Global Times stated that Beijing is unlikely to approve this deal as it hurts China’s national security, interests and dignity.
Bytedance is seeking a valuation of $60 bn for TikTok after the US president Donal Trump “approved the deal in the concept.” Oracle will buy a 12.5% stake in the new company — TikTok Global, while Walmart has agreed to buy 7.5%. Walmart’s CEO Doug McMillon, along with three other American’s, will be among the five directors on TikTok Global’s board. Oracle and Walmart would pay a combined $12 bn for stakes if they agree to the asking price.
ByteDance said that China will need to approve its proposed deal with Oracle Corp for TikTok app, , indicating that it still has a lot of hurdles to escape TikTok ban. ByteDance came up with a new plan and made Oracle Corp its “trusted tech partner”. This, however, did not satisfy the Trump administration and he said that the app would be banned as early as Sunday in the US. ByteDance is facing strong criticism in China for seeming to give in to US pressure.
US President Donald Trump questioned ByteDance’s plan to hold a majority stake in TikTok and said he didn’t favour the idea of a Chinese firm retain control. Six Republican senators urged him to reject the deal as long as it was tied to ByteDance, as it “failed to meet the intent of the president’s executive orders”. While Trump fears that TikTok could threaten national security, he may not want to alienate 100M American TikTok users ahead of the Nov 3 elections.
ByteDance will place TikTok’s new global headquarters in the US in an attempt to escape Trump ban, CGTN reported. The firm will continue to retain maximum stake in the platform, whereas Oracle and Walmart will own a minority stake. Independent third parties will serve as the directors of the new company. US users’ data will be stored in the country itself and Oracle will serve as the data service provider. TikTok also committed to creating 20K new jobs.
ByteDance, the owner of TikTok, will not sell or share the algorithm behind the short video-sharing app in any sale or divestment, Chinese state media reported quoting sources from the unicorn’s boardroom discussions. The Bejing based firm’s US-based technology team, however, would be free to develop a new algorithm, The South China Morning Post reported. The report went on to add that this would be a condition for a sale of the company’s US assets.
ByteDance, as per the sources, will invest billions of dollars and recruit hundreds of people in Singapore over the next 3 years. Also, the firm will move some of the TikTok’s staff from China to Singapore. Earlier there were reports that ByteDance was planning to make Singapore its beachhead for the rest of Asia’s business. And Singapore has also been looking to attract tech firms and investors. Now, US’ restrictions on TikTok can possibly facilitate this.
ByteDance is in talks with the US govt about how it can retain some ownership of TIkTok’s US ops while also satisfying regulators in China and the US. Possible workarounds include handling over the data control to American tech firm while “still holding on to some ownership assets”. Earlier, there were reports that ByteDance has chosen a buyer and was going to announce the details soon but there’s a possibility that new Chinese law wouldn’t let the deal happen.
SoftBank is in early talks for acquiring TikTok India business. The deal will depend on factors such as valuation, government regulations etc. It could tie up with other partners for the deal. Earlier, the firm begun talks with Reliance Jio for acquiring TikTok but these talks fizzled out. SoftBank owns a minority stake in TikTok’s parent ByteDance. Reliance-Jio was being seen as a logical suitor for TikTok as it does not have a social media platform yet.