TikTok unaware of $5bn US ‘education fund’ request

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Bytedance, the owner of TikTok, says it has not heard about a $5bn (£4bn) contribution to a new education fund requested by US president Donald Trump, at a rally in North Carolina.

The firm released a statement on its Chinese language website.

It said it wanted to offer an “explanation of some false rumours” about its deal with Oracle and Walmart.

It also said there was no plan to transfer ownership of the valuable algorithms which power TikTok.

Donald Trump had threatened to ban the app in the US unless a sale was agreed with a US firm by the middle of September.

A deal was eventually struck to create a new division, TikTok Global, in partnership with Oracle and Walmart, based in the US.

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Mr Trump said at the weekend that he had asked the companies involved to put up the money “so we can educate people as to the real history of our country”.

TikTok said the $5bn figure was “a forecast of the corporate income tax and other operating taxes that TikTok will need to pay for its business development in the next few years” and said it had not been finalised.

It added, in a statement made on social media: “We would like to clarify that this is the first time that we have heard the news about a $5bn education fund”.

Bytedance also claimed it would retain an 80% stake of TikTok Global.

“China has been determined to emphasise in recent months that the country still has full control of TikTok, amid nervousness at home over the company potentially being divested,” said the BBC’s China Media Analyst Kerry Allen.

“When Oracle agreed a deal with ByteDance last week so that TikTok could remain active in the States, Chinese media emphasised that the deal was “co-operative”, with both parties playing an equal part, rather than Oracle bailing out the Chinese tech giant.”

But China may yet decide that it does not approve of the deal, said Dr Richard Windsor, founder of research firm Radio Free Mobile.

That’s because while Bytedance may retain TikTok’s algorithm, it will still run on US Oracle’s infrastructure.

“If one flips the deal on its head and imagines a situation where a world-leading piece of US software was going to be run on Chinese servers where a Chinese company had full access to it, one can start to see why China might object,” he said.

Related Topics

  • TikTok

  • China
  • Donald Trump


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