The fate of TikTok isn’t fully settled yet.
In a sign that the talks over the ownership transfer of TikTok to U.S.-controlled parties — forced by the Trump administration — could potentially get derailed, Oracle and ByteDance, TikTok’s Chinese parent, are making different claims about who will own what in the newly reincarnated TikTok Global.
On Sunday, ByteDance said in a statement that it would own 80% of TikTok Global, with Oracle and Walmart collectively taking a 20% stake. TikTok Global would plan to launch an IPO on a U.S. stock exchange, after which ByteDance’s interest in TikTok would be further diluted.
But on Monday, Oracle EVP Ken Glueck, who is the company’s chief lobbyist, said in a statement: “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.”
The contradictory statements could threaten official approvals of the TikTok deal, which President Trump said Saturday he had given his “blessing” to in concept.
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On Monday, Trump, on Fox News’ “Fox & Friends,” said his approval was preconditioned on Oracle assuming control of TikTok. “If we find that they don’t have total control, then we’re not going to approve the deal,” he said. Trump said that ByteDance would “have nothing to do with [TikTok], and if they do, we just won’t make the deal.”
Oracle chairman Larry Ellison is a Trump supporter (he held a fundraiser this year for the president) and Oracle CEO Safra Catz was on Trump’s presidential transition team. In March, the White House named Walmart CEO Doug McMillon to its coronavirus task force.
What isn’t disputed: Oracle plans to take a 12.5% stake and Walmart will get 7.5% in pre-IPO equity in TikTok Global. The new company will be based in the U.S. and run on the Oracle Cloud platform. ByteDance will continue to maintain control over the AI algorithms that power the TikTok app’s video recommendations (and which ByteDance uses for the similar Douyin app, available in China). The deal values TikTok at as much as $60 billion, according to reports by the Wall Street Journal and Bloomberg News.
What about the remaining 80%?
ByteDance says it will control that stake. But according to Oracle, TikTok Global will be majority-owned by American investors — including four venture-capital firms, which are each existing ByteDance investors: Susquehanna International Group, General Atlantic, Sequoia Capital and Coatue Management. With the holdings of those U.S. VCs, TikTok Global would be 53% owned by U.S. companies or investors, the Wall Street Journal reported.
The discrepancy between the ByteDance and Oracle descriptions of the new TikTok’s ownership structure appears to stem from the need to appease political leaders in each of their respective countries.
ByteDance founder and CEO Zhang Yiming would continue to retain a large stake in TikTok Global — and that, combined with the existing ByteDance U.S.-based investors, could be how ByteDance is telling Chinese authorities it will remain in charge. Oracle, facing Trump’s insistence that TikTok be transferred to U.S. owners, is emphasizing that technically, ByteDance itself will not hold an interest in the new TikTok Global.
TikTok Global will have four American citizens on its five-member board of directors, according to a joint statement from Oracle and Walmart. ByteDance’s Zhang will be the only non-U.S. board member, alongside Walmart’s McMillon, General Atlantic’s William Ford, Susquehanna’s Arthur Dantchik and Sequoia’s Douglas Leone, the New York Times reported.
Meanwhile, over the weekend, TikTok got a one-week reprieve of the Commerce Department’s ban on downloads of the social video app until next Sunday, Sept. 27, citing President Trump’s provisional approval of ByteDance’s deal. The Trump administration has given ByteDance a Nov. 12 deadline to sell the TikTok U.S. operations to majority American ownership; otherwise, the U.S. government will proceed with a full ban on TikTok.