NEW YORK/BEIJING • US President Donald Trump yesterday said he would rescind his tentative blessing for a deal between Oracle and ByteDance to create a new US-based TikTok service if the Chinese company retains control of the operation.
Speaking in an interview on Fox News, Mr Trump also indicated that he expected Chinese influence to be diluted by a future public offering of the new company. "They will have nothing to do with it, and if they do, we just won't make the deal," Mr Trump said, referring to TikTok's owner ByteDance.
"It's going to be controlled, totally controlled by Oracle, and I guess they're going public and they're buying out the rest of it... and if we find that they don't have total control then we're not going to approve the deal."
China's ByteDance yesterday said TikTok's global business will become its subsidiary, even as Oracle and Walmart said over the weekend that they and other US investors would own the majority of the video app following a deal with Mr Trump's administration.
Mr Trump signed an executive order on Aug 14 giving ByteDance 90 days to sell TikTok, amid concerns that the personal data of as many as 100 million Americans that use the app could be passed on to China's Communist Party government.
Last Saturday, he said that he supported a deal in principle that would allow TikTok to continue to operate in the United States.
But accounts of the deal differ. ByteDance said in a statement yesterday that it will own 80 per cent of TikTok Global, a newly created US company that will own most of the app's operations worldwide.
Oracle and Walmart, which have agreed to take stakes in TikTok Global of 12.5 per cent and 7.5 per cent respectively, had said last Saturday that majority ownership of TikTok would be in US hands.
ByteDance's statement said it was a "rumour" that US investors would be TikTok Global's majority owners and that ByteDance would lose control over TikTok. Some sources close to the deal have sought to reconcile the discrepancy by pointing out that 41 per cent of ByteDance is owned by US investors, so by counting this indirect ownership, TikTok Global would be majority owned by US parties.
One of the sources said the deal with Oracle and Walmart values TikTok Global at more than US$50 billion (S$67.7 billion).
TikTok also confirmed plans for an initial public offering of TikTok Global. The Beijing-based firm said TikTok Global's board of directors will include ByteDance founder Zhang Yiming as well as Walmart's chief executive Doug McMillon and current directors of ByteDance.
Oracle and Walmart had said in a joint statement on Saturday that four out of the five board of directors will be Americans.
The current plan for TikTok Global does not involve any transfer of algorithms or technologies, and Oracle will be able to inspect TikTok US' source code, according to ByteDance.
Oracle and Walmart have said that all of TikTok's technology will be in the possession of TikTok Global.
ByteDance also said a US$5 billion payment of taxes that TikTok Global is reportedly supposed to make to the US Treasury is based on estimated income and other taxes the company will need to pay over the next few years and has nothing to do with the deal reached with Oracle and Walmart.
Mr Trump last week said there would be a US$5 billion US education fund as part of the deal, but ByteDance has said it was not aware of this.