Today, ByteDance issued a statement about some false rumors about TikTok.
ByteDance stated that, to ensure 100 million US users can continue to use TikTok, meet US government regulatory requirements, and strengthen TikTok’s business in the US, ByteDance, Oracle, and Walmart have reached a principal consensus to cooperate on TikTok. The three parties will advance negotiations based on the relevant consensus and hope to quickly reach a cooperation agreement that complies with the laws of both China and the United States.
In response to some rumors about the tripartite cooperation, we at this moment clarify as follows:
Rumor 1: The main shareholder of TikTok Global is an American investor, and ByteDance will lose control of TikTok.
Actual situation: TikTok Global is a wholly-owned subsidiary of ByteDance, headquartered in the United States. TikTok Global plans to launch a small-scale pre-IPO financing, after which ByteDance will hold an 80% stake. Members of the TikTok Global board include the founder and current director of ByteDance and the CEO of Walmart. The company will also pursue an IPO to further strengthen corporate governance and enhance transparency.
Rumor 2: Oracle may use and possess the source code of TikTok.
Actual situation: The current plan does not involve transferring any algorithms or technologies. Oracle has the right to conduct a security review of TikTok’s U.S. source code. Sharing source code is a common solution for multinational companies to address local data security concerns. In 2016, Microsoft established a Technology Transparency Center in Beijing, allowing Chinese technology experts to review the source code of Microsoft products and services to verify their security. In 2019, Cisco opened a Technology Validation Service Center in Bonn, Germany, publicly verifying that its 5G source code complies with the German Federal Office for Information Security’s requirements.
Rumor 3: TikTok Global will pay $5 billion in taxes to the US Department of the Treasury under this plan.
Actual situation: The so-called $5 billion tax payment to the U.S. Department of the Treasury refers to the projected corporate income taxes and other operational taxes that TikTok will need to pay over the next few years as its business develops. TikTok is confident about its future growth, but the exact tax amount still needs to be determined based on its business performance and the U.S. tax structure. This tax projection is unrelated to the current cooperation plan.
Rumor 4: About the education fund totaling $5 billion dollars.
Actual situation: We also learned about this $5 billion education fund for the first time from the news. The company has been committed to investing in the education sector and plans to work with partners and global shareholders to launch online classroom projects for students worldwide, based on artificial intelligence and video technology.
