Trump: TikTok to be "Totally Controlled" by Walmart and Oracle

Donald Trump said he’s approved Oracle Corp.’s bid for the U.S. operations of TikTok “in concept,” a deal forced by the president’s orders last month declaring the popular video-sharing app a national security threat.

“I have given the deal my blessing,” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, N.C. “I approved the deal in concept.”

The new company, which will be called TikTok Global, has agreed to donate $5 billion to an educational fund based in Texas, which Trump said would satisfy his request for a contribution to the government for helping to arrange the deal.

“They’re going to be setting up a very large fund,” Trump said. “That’s their contribution that I’ve been asking for.”

TikTok Global will likely be headquartered in Texas and has said it will hire as many as 25,000 people, Trump said.

The deal is the result of Trump’s orders last month over national security concerns about TikTok’s ownership by ByteDance Ltd., a Chinese company.

The Chinese government must now sign off on the transaction for it to go forward.

Trump is ramping up pressure on Chinese-owned apps in the weeks before the Nov. 3 presidential elections, citing national security concerns about the data U.S. citizens provide the apps and the potential for spying by China. The president is trailing his opponent Joe Biden in polls and has sought to portray himself as tougher on Beijing than the Democrat.

Under the terms of the agreement between the two companies, Bytedance retains a majority of TikTok’s assets and control over the algorithm, with Oracle and other U.S. investors taking minority stakes.

In a phone call earlier Friday, Trump told Oracle Chairman Larry Ellison and WalMart Inc. Chief Executive Officer Doug McMillon that he still expects the U.S. government to receive a cash payment as part of the transction. It remains unclear how that would be achieved.

The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter.

Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter.

The deal came together last weekend, the result of high-level negotiations between ByteDance, Oracle and top Trump administration officials after ByteDance rejected a bid from Microsoft Corp. and WalMart to buy the U.S. TikTok service outright.

WalMart remains interested in investing in the deal and could land a board seat on the new company, according to one person familiar with the matter.

Beijing has signaled it would greenlight a deal as long as ByteDance doesn’t have to transfer the artificial intelligence algorithms that drive TikTok’s service, Bloomberg has reported.