Trump's $5billion Tik Tok pay-off to counter black history project: President blesses purchase by Oracle and Walmart if they agree to give $5 billion to educate patriotic 'real history of our country'
Donald Trump has given his blessing for a deal between TikTok and a coalition of Oracle and Walmart - and revealed the agreement comes with a $5billion fund going to education programs on 'the real history of our country'
On Saturday, shortly before departing for a campaign rally in North Carolina, the president said 'I have given the deal my blessing', adding 'it will have nothing to do with China.'
He continued: 'It'll be totally secure, that's part of the deal.'
Trump told supporters at his rally that the $5billion education fund would teach 'real history, not the fake history' - in an apparent dig at the New York Times' 1619 project.
The deal will see TikTok become a new Texas-based company, potentially bringing in 25,000 jobs, Trump said.
Oracle will take a 12.5 per cent share in the new company, TikTok Global, while Walmart will take 7.5%. Chinese firm ByteDance will retain roughly 80% of the new company, according to the Wall Street Journal.
But because ByteDance is 40% owned by US investors, the new TikTok Global will technically have a majority American ownership.
Any deal would still need to be signed off by Beijing. Chinese authorities have said they would not allow ByteDance to sell the algorithms used by TikTok, which are believed to hold much of the value for the app.
After the deal was announced, the Commerce Department said it would delay a ban on downloads of the app which was set to come in on Sunday night.
The ban will now take effect on September 27, but could be delayed or removed if the deal is finalized.
Donald Trump on Saturday announced that he had approved a deal for Oracle to buy TikTok
Trump said that Oracle and Walmart are planning to set up a $5 billion fund 'for the education of American youth'.
At his rally he said he had told company leaders: 'do me a favor, could you put up $5 billion into a fund for education, so we can educate people as to real history of our country - the real history, not the fake history.'
Sources told Bloomberg that the grant money would come from a public offering in about a years time.
ByteDance first heard about the $5 billion education fund from news reports, a company spokeswoman said
Trump has previously railed against the The New York Times Magazine's '1619 project' which seeks to reframe US history around the consequences of slavery, and announced he will sign an order to promote patriotic education through an initiative dubbed the '1776 Commission'.
The panel, he said, would be tasked with encouraging educators to teach students 'about the miracle of American history' and plan for the commemoration of the 250th anniversary of the signing of the Declaration of Independence.
It is unclear if the TikTok billions will be allocated to that order.
In a joint statement Saturday, Oracle and Walmart said that they and other companies involved in the deal plan to create an educational initiative to provide an online video curriculum teaching a range of subjects.
Four of the new company's five board members will be American, according to Oracle and Walmart.
Walmart's CEO Doug McMillon will be one of the American board members, the retail chain said, but the other members have not been announced.
The company will push for more American ownership with a public shares offering next year.
'In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens,' Walmart said.
In their statement, Oracle and Walmart said TikTok Global would 'pay more than $5billion in new tax dollars to the US Treasury'.
Larry Ellison, chief technology officer for Oracle, said that TikTok was won over partly by the fact that Zoom had recently moved a large portion of its video conferencing infrastructure to Oracle.
He described Oracle's technology as 'much faster, more reliable, and more secure' than its rivals.
TikTok said in a statement: '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 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 per cent 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.
TikTok confirmed on Monday that it submitted Oracle's proposal to the U.S. government for approval.
ByteDance had been racing to clinch a deal with the White House that would stave off a U.S. ban on TikTok that Trump has threatened could happen as early as next week.
Chinese President Xi Jinping said on Thursday that 'key core technology' must be retained
Concern had been mounting that a deal might see China retain some control of the company.
On Thursday sources said 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.
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.
While a deal is being negotiated, Chinese President Xi Jinping said Thursday that 'innovation is the most important quality of business management, and it is also what we must overcome obstacles to do in the future.'
'Key core technology must be firmly kept in our own hands,' he added, according to China's official Xinhua news agency.
No comments