TikTok is getting more time to finalize a deal to sell the short-form video app. On Wednesday, TikTok’s parent company, ByteDance, received an extra week to sell its US operations. The short-video app also faced a potential US ban, but federal judges have blocked that from happening.
The extension follows President Donald Trump’s August executive order requiring China-based ByteDance to sell the US operations by Nov. 12. TikTok asked for an extension from the Committee on Foreign Investment in the United States, which reviews foreign acquisitions for national security risks. With the latest shift, the committee has pushed back the deadline twice. The company now has until Dec. 4.
ByteDance has struck a preliminary deal with software company Oracle and retail giant Walmart, but the agreement still needs to be finalized. There’s also been confusion about the terms of the deal, including the amount of control each company will have over TikTok and whether the arrangement will satisfy national security concerns.
In a statement, a spokesperson for the Treasury Department, which houses CFIUS, said the committee was reviewing a revised submission by ByteDance. A representative for the company declined to comment.
TikTok says the Trump administration hasn’t given the company feedback on its proposed solutions to address the government’s concerns, which TikTok says are unfounded. The Treasury Department says it’s been clear about the needed steps. The silence from the Trump administration, and a looming deadline, prompted TikTok to legally challenge the order earlier this month.
A forced sale wasn’t the only threat TikTok faced from the Trump administration. Trump also issued another executive order, which would’ve been enforced by the Commerce Department, to bar any US transactions with ByteDance because of concerns that the data TikTok collects could “allow the Chinese Communist Party access to Americans’ personal and proprietary information.” Federal judges in Washington and Pennsylvania have blocked the ban.
Here’s what you need to know:
What’s in the deal between TikTok, Oracle and Walmart?
Oracle and Walmart would get a combined 20% stake in a new company called TikTok Global, which is expected to go public in the next year. Four of the five members on TikTok Global’s board of directors will be American.
Oracle will host all US user data on its cloud platform and be tasked with “securing associated computer systems,” TikTok said in a statement.
“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.
TikTok Global also plans to create 25,000 US jobs as part of an expansion of its global headquarters, which will remain in the US. TikTok Global will pay more than $5 billion in new tax dollars to the US Treasury, according to Walmart. It will also create an educational program to “develop and deliver an AI-driven online video curriculum” that includes courses in math, reading, science, history and computer engineering for children.
Does that mean ByteDance owns 80% of TikTok Global?
There’s confusion over how big a role ByteDance would play in TikTok Global. ByteDance says that it will have an 80% stake in TikTok Global before the new company goes public.
But Ken Glueck, Oracle executive vice president, said in a statement that “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.”
A person familiar with the deal told The Wall Street Journal that ByteDance wouldn’t technically be an owner of TikTok Global because the shares would be given to ByteDance investors. About 40% of ByteDance is owned by US venture capital firms……..Read More>>