US President Donald Trump said he supports a deal that will allow TikTok to continue to operate in the United States, after threatening to ban the Chinese-owned app in August.
He told reporters at the White House he backs the deal with TikTok owner ByteDance, Oracle and Walmart to create a new company that will assume TikTok's US operations called TikTok Global.
The US Treasury said in a statement, "Oracle will be responsible for key technology and security responsibilities to protect all US user data. Approval of the transaction is subject to a closing with Oracle and Walmart and necessary documentation and conditions to be approved by" the Committee on Foreign Investment in the United States.
US judge blocks Washington's ban on WeChat
In an ever-escalating technology and espionage battle between Washington and Beijing, the Trump administration had ordered the ban on downloads of video-sharing app TikTok as well as messaging platform WeChat, both owned by Chinese companies.
But a US judge blocked the government's ban on WeChat downloads on Sunday, hours before it was due to take effect, saying it granted the "motion for a nationwide injunction against the implementation" of the government order, with the judge citing concerns over free speech.
The order against WeChat would have slowed it down and made it unusable in the United States for video chats with family and friends, according to experts.
The Commerce Department said on Saturday it will delay by one week an order that had been set to take effect late Sunday that would stop Alphabet Inc's Google and Apple Inc from offering TikTok in their US app stores.
A person briefed on the matter said the administration had given the parties a week to close the deal.
US shareholders are expected to control 53 percent of TikTok Global, a person briefed on the matter said, while Chinese investors will hold 36 percent.
Trump said the new company will be "totally controlled by Oracle and Walmart ... All of the control is Oracle and Walmart". Oracle said it will take a 12.5 percent stake in TikTok Global.
TikTok said under the deal, Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20 percent cumulative stake in the company.
The remaining 80 percent will be held by ByteDance, but is not clear if the ByteDance shares in TikTok Global will be distributed to ByteDance's investors when TikTok Global is incorporated, according to the source. US investors currently own about 40 percent of ByteDance.
TikTok said it was "pleased that the proposal by TikTok, Oracle and Walmart will resolve the security concerns of the US Administration and settle questions around TikTok's future in the US".
TikTok said Oracle will become the company's "trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied".
Trump promises 25,000 US jobs
Trump offered strong support for the deal he said would create 25,000 US jobs. "I have given the deal my blessing," Trump said. "I approve the deal in concept."
About 100 million Americans use TikTok and US officials have expressed concern about user data and the potential for China to access that data. "The security will be 100%," Trump told reporters.
Reuters reported on Thursday that TikTok Global will have a majority of American directors, a US chief executive and a security expert on the board.
Trump expressed annoyance this week that government lawyers told him it was not permissible to demand a "chunk" of any TikTok sales price for the Treasury. He said there would be a $5 billion (€4.2bn) US education fund as part of the deal. "That's their contribution I've been asking for," Trump said.
China still must approve the deal. "We'll see whether or not it all happens," Trump said.
(FRANCE 24 with REUTERS & AFP)