The future of the video app Tiktok in the US seems assured after President Donald Trump approved a deal between Chinese owner Bytedance and US companies. Tiktok’s global business is moving into a new US-based company, “likely in Texas,” Trump said Sunday evening. “I approved the deal.”
A formal lifting of the US measures against Tiktok is still pending. The Department of Commerce has postponed the download stop for the app in the US, which is due for users from Monday, by a week.
Trump called Tiktok a security risk because the app belongs to the Chinese Bytedance group. According to him, the Chinese authorities could have obtained data from Americans through the app. Based on this rationale, he laid the groundwork for leaving the app in the US with two orders. Tiktok and Bytedance unsuccessfully objected that data from US users is stored in the US and does not go to China.
After the deal, which has now been approved, software company Oracle will process all data from American users and provide the associated technical systems. Trump and Tiktok announced that 25,000 jobs would be created in the US.
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A central demand from Trump was also that US investors have a majority in Tiktok. In addition, it was only officially announced that Oracle will acquire a 12.5 percent interest in the company for an IPO of Tiktok Global and that supermarket giant Walmart will acquire 7.5 percent.
American majority in Tiktok
At the same time, the Wall Street Journal reported that Bytedance would keep the remaining 80 percent of Tiktok Global. However, since US investors such as start-up financiers Sequoia and General Atlantic in turn owned about 40 percent of Bytedance, you could speak of a US majority in Tiktok, informed people told the paper. Trump had previously announced, “It will be a whole new company. It will have nothing to do with China. “
US President Trump has announced a deal with Tiktok (illustration) Photo: REUTERS / Florence Lo / Illustration
The new construction could have the advantage that the deal does not require approval from the Chinese government. The Beijing leadership had previously torpedoed a direct sale of Tiktok’s US operations to software company Microsoft. It introduced a new rule according to which software algorithms can only be sold abroad with the permission of the authorities.
Tiktok will transfer $ 5 billion to the education fund
Trump, for his part, had turned down a deal in which Oracle would act as Tiktok’s technology partner with a minority stake a few days ago. The Department of Commerce then started a countdown for Tiktok to be kicked out of US app stores. Tiktok and Bytedance have filed a lawsuit in Washington.
What’s new is that Tiktok is now transferring $ 5 billion to an education fund in Texas, as Trump said during an election campaign in Fayetteville, North Carolina. He had previously asked that the US government be given some sort of commission to bring about the deal. The Education Fund must ensure that “the real history of our country is taught,” Trump said.
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A few days ago, he announced the creation of a committee to promote patriotic education – the Republican justified this by over-emphasizing the historical importance of slavery.
Tiktok already had a cloud deal with another American company: Amazon’s IT subsidiary AWS. Trump has attracted more attention in the past with attacks on the founder and boss of the online retailer, Jeff Bezos. Bezos privately owns the Washington Post newspaper, which often criticizes Trump. Oracle founder Larry Ellison, on the other hand, is one of the most prominent Trump supporters in Silicon Valley. Walmart, on the other hand, is a competitor to Amazon. (dpa)