Adding to the confusion over Oracle and Walmart’s TikTok deal, President Trump said on Monday that he would block the deal if Chinese-owned ByteDance remains in control of the video-sharing app. Trump’s comments came after he announced his approval of the deal on Saturday.
“They are going to buy it,” Trump said in an interview with Fox News, referring to Oracle and Walmart. “They’re going to have total control over it. They’re going to own the controlling interest. And if we find that they don’t have total control, then we’re not going to approve the deal.”
The president’s comments contradict a statement released by ByteDance Monday morning. ByteDance said the new deal will keep them as the majority shareholder. The agreement will create a new US-based subsidiary known as TikTok Global. 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.
ByteDance’s statement also disputed a remark by the president about a $5 billion payment included in the deal. Trump said the company agreed to pay this sum to fund a “patriotic education” initiative. But ByteDance said the $5 billion discussed was the projected amount of federal income taxes TikTok Global would pay over the next several years.
National security is the excuse the administration is using to either ban TikTok or force a sale to a US company. The allegation is that since ByteDance is a Chinese company, it is obligated to share user data with the Chinese government. For its part, TikTok denies the charge, and even the CIA recently said it has not seen evidence of the Chinese government accessing user data.
Under the new deal, TikTok will be stored on the Oracle Cloud, and user data will be stored there. “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.
The crusade against TikTok is also part of the administration’s broader campaign to confront China, which is being played out on many fronts.