A White House-approved plan to transform TikTok into a U.S.-based company would keep the operation of the viral short-video app, and likely the algorithm that has powered its rise, in Chinese hands. This structure improves the deal’s chances of finding favor in Beijing, which had threatened to veto a sale.
President Trump said Saturday he had given his blessing to a deal that would see TikTok partner with Oracle Corp. and Walmart Inc. to form a new entity called TikTok Global that would provide services to TikTok’s current users in the U.S. and most of the world outside China.
Under the terms of the deal, TikTok’s parent, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the new company, with Oracle and Walmart holding the rest, people familiar with the situation told The Wall Street Journal earlier. Because ByteDance is roughly 40% owned by U.S. investors, the new company, with the Oracle and Walmart stakes, could be described as having majority American ownership, they said. How ownership would be distributed among ByteDance and its investors is still in flux, according to various accounts from people familiar with the discussions.
On Monday, Bytedance issued a statement dismissing as rumor reports that TikTok Global’s majority investors would be American and Bytedance would lose control of TikTok. Instead, it said, TikTok Global would be created as a wholly owned subsidiary of ByteDance that would raise a round of funding just before an initial public offering, which would reduce its shareholding to 80% of the company.
At the same time, ByteDance’s 80% stake in TikTok would allay fears in Beijing that the White House was forcing China to relinquish one of the world’s hottest technology properties—or face a ban in the critical U.S. market.