ByteDance Disputes Trump’s Comments on $5 Billion For Patriotic Education

ByteDance will own 80% of new US-based subsidiary

President Trump announced on Saturday that he approved a deal that would partner Oracle, Walmart, and China’s ByteDance to create a new subsidiary that would base the video-sharing app TikTok in the US. The president said $5 billion from the deal will go towards “patriotic education,” but a statement put out by ByteDance on Monday says otherwise.

ByteDance said that the $5 billion mentioned by President Trump was the projected federal income tax the new subsidiary will pay over the next several years and had nothing to do with an education fund. President Trump has sought after a direct payment to the Treasury Department, believing the US government should get a cut of the deal it facilitates, but White House lawyers say such a payment would be illegal.

There is some dispute over the amount of control ByteDance will have over the new subsidiary, which will be called TikTok Global and headquartered in the US. President Trump said the new TikTok will have “nothing to do with China.” But Bytedance says the new deal will keep them as the majority shareholder. ByteDance will own 80 percent of TikTok Global, Oracle will control 12.5 percent, and Walmart will have the remaining 7.5 percent.

ByteDance says it will also keep control of TikTok’s algorithm. “The current plan does not involve the transfer of any algorithms and technologies,” the company said. The algorithm that recommends videos to users is believed to have made the app such a success.

National security is supposedly the Trump administration’s motivation for either banning TikTok or putting it in control of a US company. The allegation is that since ByteDance is a Chinese company, it is obligated to share user data with the Chinese government. TikTok denies the charge, and even the CIA recently said it has not seen evidence of the Chinese government accessing user data, but this remains the narrative justifying a ban or a forced deal.

Oracle says that under the deal, TikTok will run on the Oracle Cloud, meaning that’s where the user data will be stored. “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 CEO Safra Catz said in a statement.

Oracle’s leadership has strong ties to the Trump administration, another factor that could have played a role in Trump’s approval of the deal. Safra Catz was part of the administration’s transition team and was considered for key positions, including national security advisor and World Bank president. Oracle’s founder, Larry Ellison, hosted a major fundraiser for President Trump back in February.

Author: Dave DeCamp

Dave DeCamp is the assistant news editor of Antiwar.com, follow him on Twitter @decampdave.