TikTok offered to create a new U.S.-based company and add 20,000 jobs in a bid to win over U.S. government support for its proposal to address President Donald Trump’s security claims and keep its short-form video app operating in the country.
Treasury Secretary Steve Mnuchin revealed a few details in a CNBC appearance Monday morning, also corroborating that Oracle was involved in the proposal.
“I want to be careful what I say, but I will confirm we did get a proposal over the weekend that includes Oracle as the trusted technology partner, with Oracle making many representations for national security issues,” Mnuchin said. “There’s also a commitment to create TikTok Global as a U.S.-headquartered company with 20,000 new jobs.”
TikTok currently runs its U.S. operations from Culver City, California, just west of Los Angeles. The Washington Post previously reported that TikTok approached the administration with a mitigation proposal.
While Mnuchin didn’t go into detail about the proposal, people familiar with the talks who spoke on condition of anonymity to discuss them candidly told The Post that the proposed arrangement would allow its parent company Bytedance to retain ownership but outsource management of data to Oracle’s cloud-computing operations. If a deal along that structure wins administration approval, it would represent a significant step back from what the president demanded when he first threatened to ban the app in the United States in July. At the time, Trump pushed to force the sale of TikTok’s U.S. operations to an American company.
Oracle emerged as the unlikely victor Sunday afternoon to work with TikTok to try to satisfy both U.S. and Chinese governments, beating out a rival bid from Microsoft. Trump previously issued an order that would ban the app in the United States beginning Sept. 20 over national security concerns. He followed that with a second order that would essentially require TikTok’s parent company Bytedance to divest from its operations in the United States.
Mnuchin didn’t say that Oracle would take an ownership position, but would serve as “the trusted technology partner.”
In a statement, TikTok spokeswoman Hilary McQuaide said, “We can confirm that we’ve submitted a proposal to the Treasury Department which we believe would resolve the Administration’s security concerns.”
In a statement after Mnuchin’s comments, Oracle spokeswoman Deborah Hellinger confirmed “it is part of the proposal submitted by Bytedance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. “
Oracle is an unusual choice given that it has no consumer business. The company is massive, but provides business software, such as database services, that companies use to run their operations.
But Oracle’s close relationship with Trump may have given it an upper hand, as it beat out Microsoft to work with TikTok. Oracle’s chief executive, Safra Catz, has dined at the White House with Trump and served on the president’s transition team after his election in 2016. Oracle co-founder and Chairman Larry Ellison hosted a fundraiser for Trump this year.
Mnuchin said the administration “had a lot of confidence in both Microsoft and Oracle.”
Mnuchin would only say that national security remains the priority, and that regulators will discuss the proposal with Oracle “over the next few days.”
“There has always been a critical factor for us, driving national security is making sure that the technology on Americans’ phones is safe and making sure that it is not corrupt,” Mnuchin said.
TikTok has repeatedly insisted that it is not a national security threat and that it does not share any U.S. customer information with the Chinese government.
The new proposal will be taken up by the Committee on Foreign Investment in the United States, which reviews national security implications of foreign investments.
“Then we’ll be making a recommendation to the president and reviewing it with him,” Mnuchin said.
The Washington Post’s Rachel Lerman and Ellen Nakashima contributed to this report.