(Noted News) — ByteDance, the Chinese tech conglomerate that owns video-sharing app TikTok, is reportedly racing to give TikTok an IPO to avoid being banned from the U.S. by the White House. This comes following the Trump administration’s concerns that TikTok, used by almost a third of the American population, has the potential to mine data from Americans and funnel it to China’s Communist Party.
On August 6th, President Trump signed an executive order urging aggressive action against TikTok, citing multiple security threats against the United States.
“TikTok automatically captures vast swaths of information from its users, including internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information—potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage,” the order states.
During the growing debate over tech censorship in the U.S., the White House also expressed concern over TikTok’s willingness to censor content considered problematic by the Chinese government.
“TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.”
According to sources inside Reuters, the White House and ByteDance have come to an interim agreement to give at least 60% ownership of Tik Tok’s American operations to American companies, likely Oracle Corp (ORCL) and Walmart (WMT).
Donald Trump said he has spoken with Oracle and Walmart but that a final deal had not been reached yet. White House chief of staff Mark Meadows said the situation was still fluid.
“There’s no definite proposal that the president’s being asked to consider or reject at this point,” Meadows said.
On Sunday, Microsoft’s $50 billion offer for TikTok was rejected, leaving Oracle and Walmart as the winning bidders.
There is still no guarantee that Trump will sign off on the deal, or that he will get all his requests met free of compromise. Though the American version of TikTok would have mostly American ownership, it is not clear what TikTok would do with its assets outside of the U.S.
TikTok was recently valued at over $50 billion, so an IPO would be one of the biggest technology IPOs in market history. According to ByteDance, a headquarters in the U.S. would bring 25,000 new jobs to the country.
When Ipsos and Reuters conducted a national poll, up to 40% of Americans backed Trump on banning TikTok if it was not sold to an American company. 69% of Republicans supported the order.
This is not the first time the Trump campaign has cracked down on national security compromises from China. For years, there have been claims of Chinese infiltration into intelligence agencies, companies, government institutions, and financial markets, with multiple arrests of alleged Chinese spies made.
Assuming a deal is reached between ByteDance and the U.S., an IPO for TikTok should be ready within one year.