Walmart has reportedly joined Oracle’s bid to do a deal with TikTok, but the proposal to allow Chinese parent ByteDance to retain a majority stake in the popular video-sharing app faces stiff hurdles for approval.
Under the terms of the proposal, Oracle would have a 20 percent stake in TikTok’s new U.S. entity, as well as access to all source code, sources told CNBC host David Faber.
According to NBC News correspondent Jo Ling Kent, sources say the deal would involve TikTok becoming a global company headquartered in America, with Oracle taking responsibility for U.S. operations and user data and ByteDance retaining majority ownership.
The new entity would have a separate board, on which Walmart would control one seat, the sources said.
Officially, Oracle has only said it is part of a proposal submitted by ByteDance to the U.S. Treasury Department to serve as ‘trusted technology provider’ to the Chinese company, providing no further details on the terms of the deal.
Walmart has reportedly joined Oracle’s bid to do a deal with TikTok, in a deal that would create a new US-based entity with Oracle as a 20% shareholder and ByteDance in a majority stake
The new entity would have a separate board, on which Walmart would control one seat, according to the new reports on Thursday
A decision on Oracle and ByteDance’s proposal will likely come in the next 24 to 36 hours, sources told CNBC on Thursday morning.
Walmart on Sunday issued a statement, saying: ‘Walmart continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties. We know that any approved deal must satisfy all regulatory and national security concerns.’
A Walmart spokesman on Thursday declined to comment further, and Oracle did not immediately respond to inquiries from DailyMail.com on Thursday morning.
An outright sale of TikTok’s operations or technologies was not included in ByteDance’s proposal to the United States, Chinese state media reported on Thursday, citing a separate statement from the company.
President Donald Trump has already signaled that he is strongly opposed to a deal that allows ByteDance to retain majority control, citing national security concerns over user data.
‘Conceptually I can tell you I don’t like that (ByteDance keeping a majority ownership of TikTok). That has been reported, but it has not been told to me yet. If that is the case, I’m not going to be happy with that,’ Trump told reporters at the White House on Wednesday. He added that would be briefed on the deal and consider it on Thursday.
If a deal is not finalized by Sunday, Trump has already signed an executive order that would shut down TikTok in the U.S. — likely enraging the app’s 100 million American users just weeks before the presidential election.
Trump has said he is a fan of Oracle’s co-founder and Chairman Larry Ellison (right), one of few tech executives to openly support the Republican President
White House Chief of Staff Mark Meadows said on Thursday that if TikTok remains predominantly Chinese-run under the Oracle deal, that would not meet Trump’s national security objectives.
Meadows said the administration is still looking at details of the deal and whether it meets national security thresholds, referring to plans by China’s ByteDance to keep a majority stake in the U.S. operations of the popular social media platform.
The proposal calls for Oracle Corp to become a ‘trusted technology provider’ for TikTok’s U.S. operations.
Former national security officials and regulatory lawyers say that ByteDance faces an uphill struggle to convince the White House to allow it to keep majority ownership of TikTok.
‘After [The Committee on Foreign Investment in the United States] made a recommendation to the President and the President issued an executive order requiring divestment, it would be unprecedented for the parties to negotiate a solution short of a divestment,’ said Aimen Mir, who oversaw CFIUS reviews between 2014 and 2018 as Deputy Assistant Secretary for Investment Security at the U.S. Department of the Treasury, and is now a partner at law firm Freshfields Bruckhaus Deringer LLP.
However, Mir noted that ‘it would clearly be within the authority of the President to modify his order’ to allow an alternative to divestment, if he so chose.
ByteDance has also explored divesting a majority stake in the U.S. business of TikTok, and in July it signed a letter of intent with Microsoft Corp that contemplated the sale of that business to the Redmond, Washington-based company.
However, Microsoft said on Sunday that ByteDance had turned down its offer, and it remains unclear whether the Chinese firm would shed most of its ownership of TikTok to clinch a deal with the White House.
Further complicating matters, ByteDance said on Thursday that China will need to approve its proposed deal with Oracle for TikTok.
Last month, China updated its export control rules to give it a say over the transfer of technology, such as TikTok’s recommendation algorithm, to a foreign buyer, making a full sale even more difficult.
Chinese officials have said ByteDance should not be coerced by the United States into a deal.