Trump steps back from the brink as he approves TikTok’s sale, while WeChat wins an 11th hour reprieve from outright curbs
- TikTok Global is likely to be headquartered in Texas and plans to hire at least 25,000 people, Trump told reporters at the White House
- Separately, a magistrate judge in San Francisco granted a preliminary injunction to put Trump’s Wechat curbs on hold
In the end, US President Donald Trump blinked in the stand-off between the US and China over TikTok.
Trump, who demanded an outright sale of TikTok’s US business over national security and data privacy concerns, took a step back on Saturday after China issued updated export rules and as concerns mounted over a backlash ahead of the November presidential election, according to analysts. Separately, his attempt to ban Tencent Holding’s WeChat was put on hold by a judge.
The new export controls, which cover two key technologies used by the short video app, meant an outright sale to a US firm was off the table, said Wang Yong, a professor at the Peking University School of International Studies. Another factor was Trump’s desire to win support among US tech firms ahead of the election, he added.
The compromise was a big win for Silicon Valley-based Oracle, which has close ties to the Trump Administration. On Saturday, Trump said he approved “in concept” a new deal that would allow TikTok to continue operating in the US.
TikTok confirmed that Oracle and Walmart will be eligible to purchase “up to a 20 per cent cumulative stake” in the pre-IPO financing round of TikTok Global, a new company that will run its non-China business. The two companies would pay US$12 billion for their stake, if they agree to the US$60 billion valuation sought by TikTok’s parent Bytedance, Bloomberg reported, citing a person familiar with the matter.
“We are pleased that the proposal by Tiktok, Oracle, and Walmart will resolve the security concerns of the US administration and settle the question around TikTok’s future in the US,” TikTok said in a statement.