“I have given the deal my blessing,” Trump told reporters Saturday. “If they get it done that’s great, if they don’t, that’s fine, too.”
The deal reached Saturday alleviates a major burden for TikTok, which had been slated to be banned from U.S. mobile app stores starting Sunday night. Those restrictions would now take effect Sept. 27, the Commerce Department said Saturday.
It’s unclear how the Chinese government will respond to the decision, but officials there have been agitated by Trump interfering in the operations of one of their largest tech conglomerates.
Trump had previously given TikTok’s parent company, ByteDance, the choice to either find an American buyer or shut down in the United States. The new arrangement falls short of that demand. Beijing-based ByteDance will remain a minority shareholder in TikTok, but see its power over its U.S. operations curtailed considerably.
The deal puts TikTok’s global headquarters in the U.S. Oracle and Walmart will own up to 20 percent of the newly registered company, TikTok said in a statement Saturday. Oracle put its ownership stake at 12.5 percent. Venture capital firms like General Atlantic and Sequoia will also own chunks of the company, according to a person close to the negotiations.
“Our team works tirelessly to provide a safe and inclusive platform and we’re thrilled that we will be able to continue serving our amazingly diverse and creative community,” TikTok said in a statement.
TikTok will also appoint a board of directors made up of U.S. citizens, with the government having the authority to veto members, another person with direct knowledge of the terms told POLITICO. The board would include at least one former intelligence official or other national security expert who would lead a three-person committee overseeing security matters.
“The thinking is this is a structure no one can say has any loopholes,” the person said. “There’s no room for shenanigans. It’s far beyond anything any online, consumer-facing company has done.”
Both people spoke anonymously before the terms were made final.
Administration officials have raised particular concern about the handling of data from U.S. users, and ByteDance’s proposal would turn over data management to Oracle. Oracle would have complete control over the company’s data, as well as the ability to review its source code for any security concerns.
“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. “This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”
The Committee on Foreign Investment in the U.S., an inter-agency panel led by the Treasury Department, discussed the proposal at its meeting Tuesday and subsequently made a recommendation to Trump. The president is not obligated to follow CFIUS’s decision.
Cracking down on China’s global reach has been a cornerstone of Trump’s reelection effort, and he has consistently portrayed his administration as tougher on Beijing than Democratic rival Joe Biden’s would be. Trump took credit for forcing changes that he says address national security concerns, even if his insistence on a sale never fully materialized.
Treasury Secretary Steven Mnuchin said Monday that under the proposal, TikTok would create a global headquarters in the U.S. and would be expected to create 20,000 jobs — commitments that fit squarely with Trump’s pledge to bring more companies and jobs to the U.S.
Trump signed an executive order Aug. 6 that prohibited ByteDance from doing business in the U.S. effective Sept. 20. A subsequent executive order gave ByteDance until Nov. 12 to orchestrate a sale of TikTok to a U.S. buyer, but those negotiations appeared to fall apart after Beijing imposed new regulations that gave political leaders there the authority to veto a deal.
The leading suitor, Microsoft, said Sunday that ByteDance turned down its acquisition offer. That left the Oracle arrangement as ByteDance’s main path forward in the U.S., though the company is simultaneously fighting Trump’s executive order in court.
Trump expressed support for the bid involving Oracle in mid-August, telling reporters that Oracle is a “great company” that “would be certainly somebody that could handle it.” He also voiced support for Microsoft’s acquisition talks and said at the time that the administration had no preference between the two.
But Oracle executives have sought favor with Trump throughout his time in the Oval Office, opting to sit on economic and national security advisory bodies when other Silicon Valley leaders kept their distance. Catz, for instance, was appointed to the President’s Intelligence Advisory Board, which guides Trump on national security matters.
They have also been among the big donors to his re-election campaign. Catz also contributed $125,000 to the effort in May and Oracle’s billionaire chair, Larry Ellison, hosted a high-dollar fundraiser for Trump in February at his home in Rancho Mirage, Calif.