Of the many issues still surrounding TikTok’s fate, the biggest one might be whether the Trump administration approves a restructuring plan that keeps both financially and operationally in charge of China-based ByteDance in the US.
If you go by his terms, the choice has already been ruled out by President Donald Trump. Yet the plan that ByteDance and Oracle have submitted to the U.S. government will hold TikTok together under ByteDance’s operational control, according to people familiar with the matter. Oracle ‘s position would be as a “trusted technology partner,” storing and protecting the data inside U.S. premises.
ByteDance is having talks with both Oracle and Walmart over stakes in the U.S. firm, according to people familiar with the matter, but the sale would not be for 100 per cent of U.S. assets. The agreement fell apart at the 11th hour after China pushed back, saying it will have to accept a deal involving exporting artificial intelligence technology used by TikTok.
ByteDance has submitted a proposal that avoids selling the U.S. assets or all of TikTok which Trump said was necessary to avoid a ban because of conversations with the Committee on Foreign Investment in the U.S. and Treasury officials, according to inside sources. ByteDance believes its proposal with Oracle addresses CFIUS concerns based on precedent and the nature of the U.S. government’s concerns with data sharing, one of the people said. Treasury Secretary Steve Mnuchin told CNBC on Monday that the U.S. government plans to review the deal this week.
If Trump gives up his previous position, allowing the application to continue running in the U.S. without a complete sale, former TikTok CEO Kevin Mayer will serve as an unfortunate hyperbole victim of Trump’s.
Mayer had intended to announce his resignation from TikTok in conjunction with an announcement of a deal, according to people familiar with the matter. However, when news leaked to the Financial Times that he was preparing to step down when a sale was announced, he was imminent at the time when he preempted the announcement of the deal and said that he was going to step down immediately.
“I recognize that the position I signed up for — including operating TikTok internationally — looks very different because of the behavior of the U.S. administration to press for a sell-off of the U.S. sector,” Mayer wrote in a letter to staff when he resigned.
There’s further irony for Mayer: He was part of a team that was instrumental in bringing Oracle to the table as a competitive bidder against Microsoft, which first entered talks to acquire the TikTok U.S. assets in July, according to people familiar with the matter.
The U.S. government became involved in a possible ban on TikTok after India shut down the application at the end of June. After ByteDance started talks with Microsoft to take over U.S. properties to escape a ban, Mayer held talks with Oracle’s chief executive, Safra Catz, about a possible contract, the people said. Mayer spent more than 20 years at Disney and left the company for the TikTok CEO job in M.
Oracle emerged as ByteDance’s preferred partner given the firm’s close ties to Trump administration and willingness to consider a deal where it did not purchase 100 percent of the properties, two of the people said.
Kevin Mayer Resigns
Mr Mayer said he was leaving less than four months after revealing he was joining the video service. Kevin Mayer, the Chinese-owned video app’s chief executive TikTok, said on Wednesday that he was resigning after the company came under intense pressure from the Trump administration over its ties to China.
Mr. Mayer said a series of changes to TikTok ‘s structure had prompted him to leave in a note to employees which was checked by The New York Times. The app, owned by the Chinese internet company ByteDance, has been ordered by the White House to sell its operations in the US by mid-September.
Mr Mayer, who announced in May that he would join TikTok, added that he had signed up for a global role and that he had a “huge draw” for heading a global team. President Trump and other White House officials have zeroed in on technology firms as part of a policy of being tough on China, which they argue are obeyed by the Chinese government and security regulations. The Trump administration has stepped up its investigation of TikTok in recent months, claiming it poses just such a national security danger owing to its Chinese ownership.
Mr. Trump signed an executive order this month to block TikTok if ByteDance failed to sell U.S. operations of the app within 45 days. The steps taken by the White House moved ByteDance and TikTok to search for a buyer for U.S. operations of the app. TikTok has, at the same time, pushed back against the Trump administration. The business sued the U.S. government on Monday, accusing it of depriving it of due process by demanding a deal through an executive order.
Zhang Yiming, ByteDance’s founder and chief executive, told employees in a note on Wednesday that Mr. Mayer had joined the company at “possibly our most difficult moment.” He said he and Mr. Mayer had spoken, and that he understood how the global position of Mr. Mayer would be affected as he was based in the United States.
Mr. Zhang added that ByteDance and TikTok moved quickly to address their problems in the United States and India, where the application was banned in June. TikTok said in a statement, “We understand that the political dynamics of the last few months have changed drastically what the reach of Kevin’s position will be going forward, and fully respect his decision.”
TikTok’s general manager in North America Vanessa Pappas will take over as the company’s interim global director. Mr. Mayer, who was the Walt Disney Company’s top streaming executive, joined TikTok in May not only as its chief executive but also as ByteDance’s chief operating officer. Mr Mayer said he had quit Disney for TikTok in an interview at the time because “the scope of this chance was just something I couldn’t pass up.”
TikTok has become increasingly popular in the United States and other countries such as India, where it is used by adolescents and young adults to create and share videos. TikTok has said it has more than 100 million users in the United States alone. According to Sensor Tower, an app data company, the TikTok app has been downloaded about 1.9 billion times worldwide in total.
Mr. Mayer’s hiring was part of TikTok’s attempt to bring in more American executives as the app’s criticism of Washington increased. TikTok has recruited more workers in Los Angeles , New York and more than a dozen other locations in the US.
But things changed significantly soon after Mr. Mayer joined TikTok, with the pressure ramping up on the White House and then signing the executive orders this month.
The orders surprised officials at TikTok, people with knowledge of the situation have said. The business had worked for months to appease the White House by having talks with investors and others to reduce its control of China and to find a way to store data about its American users in the United States. TikTok said it currently stores data from U.S. users on servers in Virginia and Singapore.
TikTok also pointed to Mr. Mayer ‘s role as an American executive based in the country in his struggle to remain alive in the United States to argue that he was not beholden to the Chinese Government. Mr Mayer suggested in his note to employees on Wednesday that TikTok’s “the future is extremely bright.”Source: www.nytimes.com Source: www.cnbc.com