Wednesday, September 23rd 2020, 1:53 pm
By: CBS News
Walmart has agreed to back an education fund proposed by President Donald Trump as part of a deal between the retailer and Oracle to partner with Chinese-owned video-sharing app TikTok, according to a source familiar with the matter.
The financial contribution will come from the new company that emerges from the unusual transaction, called TikTok Global. The arrangement will allow the app to continue operating in the U.S. after the Trump administration threatened to ban it over national security concerns. Yet to be decided is how much money Walmart and Oracle would contribute to the fund and how it would be used.
Walmart and Oracle are looking to take a stake of up to 20% of TikTok Global. TikTok’s current owner, Beijing-based ByteDance, and possibly its investors, would get 80% of the newly formed U.S.-based entity that will be the new official owner of the popular video platform.
At a rally in North Carolina last weekend, Mr. Trump said an element of the deal for TikTok would be to create a $5 billion education fund dedicated to teaching “the real history” of the U.S.
Oracle, whose chairman Larry Ellison is a supporter of Mr. Trump, over the weekend said that it had agreed under the TikTok deal to help create an education initiative that would involve an “AI-driven online curriculum to teach children from inner cities to suburbs.” Oracle said the effort could encompass a range of topics, including history.
Walmart hasn’t said anything publicly about the education initiative. But a person with knowledge of the deal said the company also has signed off on funding an education initiative after the topic was brought up by the Trump administration officials. According to The Wall Street Journal, Mr. Trump spoke with Walmart CEO Doug McMillon about the deal over the weekend. Oracle’s Ellison also reportedly took part in the conversation.
China not yet on board
The proposed deal to unite Walmart, Oracle and TikTok could still collapse. Mr. Trump, who has authority to approve or reject the deal on national security grounds, has indicated he is for the deal. But the Chinese government has yet to give its blessing. An op-ed in Global Times, a daily newspaper seen as a mouthpiece for Beijing, said Chinese leaders were unlikely to approve it, bashing the transaction as “extortion” and an “unpalatable gambit.”
Oracle has said that ByteDance’s 80% stake would be split between the Chinese company and its current U.S. investors. By contrast, ByteDance has said it will own the entire 80%.
Walmart declined to comment for this story. Oracle and ByteDance did not respond to requests for comment.
If a deal is clinched, a five-person board at TikTok Global — set to include Walmart’s CEO, three U.S.-based ByteDance investors, and ByteDance founder and CEO Zhang Yiming — would vote on the direction and size of the education fund. Earlier this year, TikTok launched an effort to add education videos to the platform, paying universities and educators, like Bill Nye, to develop content.
But the education fund would be separate from TikTok’s previous education efforts, and would involve a donation to a non-profit that will manage the fund.
First published on September 23, 2020 / 9:42 AM
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