Donald Trump says he has approved a deal which will see Oracle lead a coalition to buy TikTok from Chinese company ByteDance.
Last month Trump ordered that ByteDance sell TikTok, or else it would be shut down in the United States.
About 100 million Americans use TikTok and U.S. officials have expressed concern about user data and the potential for China to access that data.
On Saturday, shortly before departing for a campaign rally in North Carolina, the president said he had given the green light to an offer made by California-based Oracle, working in a partnership with Walmart.
‘I have given the deal my blessing,’ he said, adding that the agreement ‘will have nothing to do with China.’
He continued: ‘It’ll be totally secure, that’s part of the deal.’
At the rally, the president said the new company would be headquartered in Texas, would hire as many as 25,000 people.
He also said that TikTok would pay $5 billion toward education on ‘the real history of our country’.
Donald Trump on Saturday announced that he had approved a deal for Oracle to buy TikTok
The Chinese government must now approve the Oracle-led deal for it to proceed
It is not known what this fund would be put towards, but Trump has previously railed against the The New York Times Magazine’s ‘1619 project’ which seeks to reframe US history around the consequences of slavery.
Oracle on Saturday said that they would take a 12.5% share in the new company, TikTok Global.
Larry Ellison, chief technology officer for Oracle, said that TikTok was won over partly by the fact that Zoom had recently moved a large portion of its video conferencing infrastructure to Oracle.
He described Oracle’s technology as ‘much faster, more reliable, and more secure’ than its rivals.
The Chinese government must now sign off on the transaction for it to go forward.
TikTok confirmed on Monday that it submitted Oracle’s proposal to the U.S. government for approval.
On Thursday Trump said his administration had spoken to Walmart and Oracle about TikTok, but at that point there was no agreed deal for the Chinese-owned short video app.
‘We’re making a decision,’ he said on Thursday.
TikTok is currently owned by Beijing-based ByteDance, and Trump ordered the sale last month or else he said he’d shut it down in the U.S.
‘We spoke today to Walmart, Oracle. I guess Microsoft is still involved.
‘We’ll make a decision, but nothing much has changed. We’ll make a decision soon.’
ByteDance had been racing to clinch a deal with the White House that would stave off a U.S. ban on TikTok that Trump has threatened could happen as early as next week.
Reuters reported on Thursday the new company, dubbed TikTok Global, will have a majority of American directors, a U.S. chief executive and a security expert on the board.
Walmart’s CEO, Doug McMillon will also get a seat on TikTok Global’s board, the source said.
Trump said the new TikTok company will be ‘totally controlled by Oracle and Walmart.’
Chinese President Xi Jinping said on Thursday that ‘key core technology’ must be retained
Concern had been mounting that a deal might see China retain some control of the company.
On Thursday sources said the deal would involve TikTok becoming a global company headquartered in America, with Oracle taking responsibility for U.S. operations and user data and ByteDance retaining majority ownership.
Officially, Oracle has only said it is part of a proposal submitted by ByteDance to the U.S. Treasury Department to serve as ‘trusted technology provider’ to the Chinese company, providing no further details on the terms of the deal.
An outright sale of TikTok’s operations or technologies was not included in ByteDance’s proposal to the United States, Chinese state media reported on Thursday, citing a separate statement from the company.
Chinese authorities have said they would not allow ByteDance to sell the algorithms used by TikTok, which are believed to hold much of the value for the app.
While a deal is being negotiated, Chinese President Xi Jinping said Thursday that ‘innovation is the most important quality of business management, and it is also what we must overcome obstacles to do in the future.’
‘Key core technology must be firmly kept in our own hands,’ he added, according to China’s official Xinhua news agency.
Trump had stressed repeatedly that he was strongly opposed to a deal that allows ByteDance to retain majority control, citing national security concerns over user data.
The terms of the agreed deal have not been made public.
What is TikTok?
TikTok is a Chinese social media app where users can live stream, create short videos and music videos and Gifs with a host of functions.
TikTok’s tagline is ‘Make every second count’.
It was the most downloaded app in the US in 2018 and the world’s fourth most downloaded app in 2018, ahead of Instagram and Snapchat.
In 2019, it became the second-most downloaded app globally behind Whatsapp.
TikTok is known in China as Douyin where it was launched in 2016 and then made more widely available around the world in 2017.
Douyin is still the version of the app used in China, available to download separately to TikTok.
Most children use the app to film themselves lip-syncing to chart hits.
It offers users a raft if colourful modification and editing tools including overlaying music, sound, animated stickers, filters and augmented reality (AR) for creating short videos.
The Beijing based social network has more than 500 million active users and the company is now worth more than $75 billion (£58 billion).