The video app Tiktok can now remain on the US market. President Trump presents a deal: Tiktok's global business moves to the United States. The company supports a Texas education fund with billions.
The future of the video app Tiktok in the US seems assured after President Donald Trump approved a deal between Chinese owner Bytedance and US company. Tiktok's global business is moving into a new company based in the US, "likely in Texas," Trump said. "I signed the deal."
A formal lifting of the US measures against Tiktok is still pending. The Department of Commerce postponed the download stop for the app in the US, which should take effect for users from Monday, by a week. Trump called Tiktok a security risk because the app belongs to the Chinese Bytedance group. In his opinion, Chinese authorities could have obtained data from Americans via the app. Following this rationale, he laid the basis for exiting the app in the USA with two orders.
Tiktok and Bytedance countered in vain that data from US users was stored in the US and did not go to China. After the deal, which has now been approved, the software company Oracle will process all data from US users and take care of the associated technical systems. Trump and Tiktok announced that 25,000 jobs would be created in the USA.
"It will have nothing to do with China"
A central demand of Trump was also that US investors hold a majority in Tiktok. In addition, it has only been officially announced that Oracle is to take over a 12.5 percent stake in the company before an IPO from Tiktok Global and that the supermarket giant Walmart will hold 7.5 percent.
At the same time, the "Wall Street Journal" reported that Bytedance would keep the remaining 80 percent of Tiktok Global. But: Since American investors like the start-up financiers Sequoia and General Atlantic in turn held around 40 percent of Bytedance, one could speak of a US majority at Tiktok, insiders told the paper. Trump had previously announced: "It will be a whole new company. It will have nothing to do with China."
The new construct could have the advantage that the deal would not require approval from the Chinese government. The leadership in Beijing had previously torpedoed a direct sale of Tiktok's US business to the software group Microsoft.
It introduced a new rule according to which software algorithms can only be sold abroad with the permission of the authorities. Trump, for his part, had rejected a deal in which Oracle would act as a technology partner of Tiktok with a minority stake a few days ago. The Department of Commerce then initiated a countdown for Tiktok to be kicked out of the American app stores. Tiktok and Bytedance filed a lawsuit in Washington.
Oracle founder Ellison is a Trump supporter
What is new is that Tiktok will now transfer five billion dollars to an education fund in Texas, as Trump said at an election campaign appearance in Fayetteville, North Carolina. He had previously requested that the US government should get some sort of commission for bringing about the deal. The education fund should ensure that "the real history of our country is taught," said Trump. A few days ago he announced the formation of a commission to promote patriotic education – the Republican justified this with the fact that the historical importance of slavery was currently being overemphasized.
Tiktok already had a cloud deal with another US company – Amazon's IT subsidiary AWS. Trump has attracted attention more often in the past with attacks against the founder and boss of the online retailer, Jeff Bezos. Bezos privately owns the Washington Post newspaper, in which Trump is often criticized. Oracle founder Larry Ellison, on the other hand, is one of the most prominent supporters of Trump in Silicon Valley. Walmart, on the other hand, is an Amazon competitor.
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