We, like you, are looking forward to a week when TikTok isn’t our biggest story every day. But the latest developments in the US do require a bit more space for unpicking: unsurprisingly, the company’s deal with Oracle and Walmart has run into a spot of bother.
We reported yesterday that the new TikTok Global entity being created as part of the deal will see ByteDance taking an 80% stake, with 20% split between Oracle and Walmart. Since then, confusion has reigned.
“TikTok Global is a 100% owned subsidiary of Bytedance, headquartered in the United States,” said ByteDance, in a corporate post published in China to explain some “false rumours” about the deal. “TikTok Global plans to launch a small round of Pre-IPO financing. After the financing, TikTok Global will become an 80% holding subsidiary of Bytedance.”
ByteDance also made it clear that the deal “does not involve the transfer of any algorithms and technologies”, although Oracle will be able to check the source code of TikTok’s US app. It also noted that the claimed figure of a $5bn payment to the US Treasury is merely “a forecast of the corporate income tax and other operating taxes that TikTok will need to pay for its business development in the next few years”.
Well, that’s clear. Oh, wait… “They [ByteDance] will have nothing to do with it, and if they do, we just won’t make the deal,” President Trump told Fox News last night. “It’s going to be controlled, totally controlled by Oracle… and if we find that they don’t have total control then we’re not going to approve the deal.”
Oracle added its own statement: “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.”
Since then, the editor in chief of the Chinese state-associated Global Times has tweeted that the Chinese government is unlikely to approve the deal “because the agreement would endanger China’s national security, interests and dignity”, while the Wall Street Journal has reported that Chinese leaders have “sped up development of a blacklist that could be used to punish American technology firms” in retaliation for the Trump administration’s actions.
It’s all going swimmingly, then. And remember, there’s only five days to go until TikTok is banned from app stores in the US if a deal hasn’t been approved…