President Donald Trump said Saturday he's given his “blessing” to a proposed deal that would see the popular video-sharing app TikTok partner with Oracle and Walmart to become a U.S. company.
Trump has targeted Chinese-owned TikTok for national security and data privacy concerns. The announcement comes just a day after the Commerce Department announced restrictions that if put in place could eventually make it nearly impossible for TikTok fans to use the app.
Trump said if completed the deal would create a new company likely to be based in Texas.
“I have given the deal my blessing,” he said. “If they get it done, that’s great. If they don’t, that’s OK too.”
Trump said the new company will be hiring at least 25,000 people and making a $5 billion contribution to a fund dedicated to education for Americans. “That’s their contribution that I’ve been asking for,” he said.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. Administration and settle questions around TikTok’s future in the U.S.,” TikTok said in a statement.
TikTok said both Oracle and Walmart will take part in a financing round before an initial public offering of stock, where they can take up to a 20% cumulative stake in the company.
The deal will make Oracle responsible for hosting all TikTok's U.S. user data and securing computer systems to ensure U.S. national security requirements are satisfied. TikTok said it's also working with Walmart on a “commercial partnership” but gave no other details.
Oracle said in a separate statement that it would take a 12.5% stake in TikTok Global. Representatives for Walmart could not be immediately reached for comment late Saturday.
Trump has been demanding that the U.S. operations of TikTok, a video app popular with younger people, be sold to a U.S. company or else be shut down. He's also been targeting WeChat, another Chinese-owned app. The dispute over the two apps is the latest flashpoint in the rising tensions between the world’s two largest economies.
Ttrump said the new company — to be known as TikTok Global — “will have nothing to do with China.”
Just a day earlier, the U.S. Commerce Department said it would bar TikTok from U.S. app stores as of late Sunday. Further restrictions that would prevent TikTok from accessing essential internet services in the country would go into effect on Nov. 12. Commerce said Saturday that it will delay the barring of TikTok from U.S. app stores until Sept. 27 at 11:59 p.m
Commerce is imposing similar restrictions on WeChat, although all of the restrictions on WeChat are set to go into effect Sunday night at 11:59 p.m.
Earlier Saturday, WeChat users asked a U.S. judge to block the moves targeting the app, saying they would restrict free speech. WeChat is an all-in-one app with instant-messaging, social media and other communication tools. The U.S. government argued that it is not restricting free speech because WeChat users still “are free to speak on alternative platforms that do not pose a national security threat.”
The aggressive tactics are part of Trump’s latest attempt to counter the influence of China, a rising economic superpower. Since taking office in 2017, Trump has waged a trade war with China, blocked mergers involving Chinese companies and stifled the business of Chinese firms like Huawei, a maker of phones and telecom equipment.
China-backed hackers, meanwhile, have been blamed for data breaches of U.S. federal databases and the credit agency Equifax, and the Chinese government strictly limits what U.S. tech companies can do in China.
China’s ministry of commerce condemned the U.S. moves and urged it to stop what it called bullying behavior. It also said China may take “necessary measures” to protect Chinese companies.
The U.S. Treasury Department said that TikTok's deal with Oracle and Walmart also still needs documentation and conditions to be approved by the Committee on Foreign Investment in the United States.