(Bloomberg) — 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. If they get it done that’s great. If they don’t, that’s OK too, ” 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 education fund, which Trump said would satisfy his demand that the government receive a payment from 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 will hire “at least” 25,000 people, Trump said.
That figure could not be immediately verified. Facebook Inc., the largest U.S. social media company, employed about 45,000 people in 2019, while Twitter Inc. employed only 4,900, according to data compiled by Bloomberg.
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 to them and the potential for Beijing to use them for spying. 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.
“It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” Trump said. “All of the control is WalMart and Oracle, two great American companies.”
Trump spoke with Oracle Chairman Larry Ellison and WalMart Inc. Chief Executive Officer Doug McMillon on Friday, telling them he still expected the U.S. government to receive a cash payment as part of the transction, according to people familiar with the matter.
The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter.
Oracle, Tiktok, and Walmart didn’t immediately respond to requests for comment.
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.
(Updates with company comments in 14rh paragraph)
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