United States President Donald Trump has given his blessing to Oracle Corp's bid for the American operations of TikTok, putting the popular video-sharing app on course to escape a US ban imposed over security concerns.
"I approved the deal in concept," Mr Trump told newsmen on Saturday as he left the White House for a campaign rally in Fayetteville, North Carolina.
"If they get it done, that's great. If they don't, that's OK too."
The new company, which will be called TikTok Global, has agreed to funnel US$5 billion (S$6.8 billion) in new tax dollars to the US and set up a new education fund, which Mr Trump said would satisfy his demand that the government receive a payment from the deal.
"They're going to be setting up a very large fund... That's their contribution that I've been asking for," he said.
Oracle will take a 12.5 per cent stake in TikTok Global, while Walmart said it's tentatively agreed to buy 7.5 per cent of the entity. The two companies would pay a combined US$12 billion for their stakes if they agree to that asking price.
Sources said TikTok's Chinese owner ByteDance is seeking a valuation of US$60 billion for TikTok.
Walmart's chief executive officer Doug McMillon will serve on TikTok Global's board of directors, the retailer said in a statement.
Four of the five board seats will be filled by Americans, according to the statement.
The deal was forced by a pair of bans Mr Trump issued the previous month over concerns concerning the data that US citizens provide to ByteDance and the potential for Beijing to use it for spying.
Shortly after Mr Trump signalled his approval, the US Commerce Department on Saturday delayed by a week a ban that would have forced Apple and Google to pull the TikTok video app from their US app stores yesterday.
TikTok said in a statement that it was "pleased that the proposal by TikTok, Oracle and Walmart will resolve the security concerns of the US administration and settle questions around TikTok's future in the US".
The company confirmed that Oracle will host all its US data and secure its computer systems.
AVERTING WORST-CASE SCENARIO
This scheme is still unfair, but it avoids the worst result, that TikTok is shut down or sold to a US company completely.
MR HU XIJIN, editor-in-chief of China's state-owned Global Times.
Oracle's Generation 2 Cloud fully isolates running applications and responds to security threats auto-nomously, according to the statement, which eliminates the risk of foreign governments spying on American users or trying to influence them with disinformation.
"Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud," said Oracle CEO Safra Catz in a statement.
Oracle will get full access to review TikTok's source code and updates to make sure there are no back doors used by the company's Chinese parent to gather data or to spy on the video-sharing app's 100 million American users, according to people familiar with the matter.
TikTok Global, together with Oracle, Susquehanna International Group, General Atlantic, Sequoia Capital, Walmart and Coatue Management, will create an educational initiative to develop and deliver an online video curriculum driven by artificial intelligence (AI), according to the statement.
To sweeten the deal for Mr Trump, TikTok also promised to hire for an additional 15,000 jobs, more than the 10,000 positions the company already pledged to fill earlier this year.
ByteDance said in a social media post that it was the first time it had heard in the news that it was setting up a US$5 billion education fund in the US.
"The company has been devoted to investing in the education field, and plans to work with partners and global shareholders to launch online classroom projects based on AI and video technology for students around the world," ByteDance said on its official account on Toutiao.
Early reaction from Chinese state media appeared positive.
"This scheme is still unfair, but it avoids the worst result, that TikTok is shut down or sold to a US company completely," wrote Mr Hu Xijin, the influential editor-in-chief of China's state-owned Global Times.
BLOOMBERG, REUTERS