There is no shortage of speculation and reports about TikTok Future in the US Amid a series of rumors, TikTok's Chinese parent ByteDance issued a statement (in Chinese) on Monday morning that brings clarity to the ongoing business that has garnered global attention in the past few weeks.
ByteDance is still the owner
China's ByteDance confirms that the company will retain an 80% stake in TikTok after a total of 20% was sold to Oracle, its "trusted technology partner," and Walmart, its "commercial partner".
However, the deal fails to address the core concerns of many observers, as my colleague Jonathan Shieber argued: “The deal benefits everyone except US consumers and those who actually have security concerns about TikTok's algorithms and know how to do them can be used to influence opinion in the USA "
The current members of ByteDance sit on the board of TikTok, all non-Chinese with the exception of ByteDance founder Zhang Yiming. Doug McMillon, CEO of Walmart, is the latest addition to the board.
TikTok aims to go public in the US
TikTok confirms that it is aiming for an IPO in the USA in order to "further improve corporate governance and transparency".
The video app clearly hopes an IPO that will expose it to closer public scrutiny could allay fears about the alleged national security threat linked to its Chinese origins.
ByteDance refers to the video app in the statement as "TikTok Global", which indicates that the app will not be split into a US unit and the rest of the world. TikTok claims nearly 700 million monthly users worldwide, according to a court document. 100 million of its users are based in the United States, where the company's current headquarters are located.
No algorithm transfer
Consistent with previous reports, ByteDance will not hand over TikTok's algorithms or technologies to Oracle. Instead, the American database giant is given the authority to carry out security checks on the US source codes of "TikTok".
"The disclosure of source code is a universal solution to the challenges of data security for multinational companies," said ByteDance, trying to equate its decision with the Microsoft Transparency Center in China as well as a similar facility of Cisco in Bonn.
It is still unclear how Oracle's role as code inspector and host of user data will resolve concerns about Beijing's possible tinkering with the black box for TikTok's content.
$ 5 billion in tax dollars
ByteDance estimates TikTok will pay a total of $ 5 billion in income taxes and other business-related tax dollars to the U.S. Treasury Department over the coming years. The final figure, however, depends on TikTok's "actual business development and US tax structure," the parent company stressed, stressing that tax money "has nothing to do with ongoing business".
In response to reports that TikTok will set up a $ 5 billion education fund in the US, ByteDance said it was unaware of such a plan but that it has consistently sought education, including working with its Partners and Shareholders ”in designing online courses powered by artificial intelligence and videos.
In China, ByteDance's break into education has been widely reported. In addition to proprietary products like the Gogokid English learning platform, the company also invested in a number of outside players, including Minerva, the venture-backed institution that challenges traditional higher education.