ByteDance clarified on Monday it would still hold a majority stake in short video app TikTok and keep indigenous technologies, such as algorithms, amid speculation on the company's fate in the light of a multiparty settlement in the United States.
The company said that it plans to carry out a small round of pre-initial public offering financing that will give ByteDance an 80 percent stake in TikTok Global, a newly established company following the proposed deal with U.S. partners Walmart and Oracle.
The board of TikTok Global would include ByteDance founder Zhang Yiming and the existing board of directors, as well as the CEO of Walmart.
ByteDance added that seeking a public listing in the U.S. should serve to "further enhance corporate governance and transparency".
The announcement was made to dispel rumors that TikTok Global would have U.S. investors as its main stakeholders and that ByteDance was losing control of the popular social media app.
At the same time, ByteDance insisted it would not be handing over TikTok's algorithms or technologies to Oracle, which could act as the "trusted technology partner "under a proposed deal.
Instead, the U.S. database firm will gain the authority to perform security checks on "TikTok's U.S. source codes".
"Displaying the source code is a common solution for multinational corporations facing local data security concerns," ByteDance said.
It highlighted the universality of the practice by likening the decision with Microsoft's Transparency Center in China established in 2016, and a similar technical verification center set up last year by Cisco in Bonn, Germany.
In response to media reports that TikTok is setting up a $5 billion education fund in the U.S., ByteDance said it was not aware of such a plan but is consistently devoted to education, including working with its "partners and shareholders" to design online classes powered by artificial intelligence and videos.
The deal originated from a U.S. presidential order to ditch Chinese ownership of the popular app, which has 100 million users in the U.S., or it would risk facing a total ban. ByteDance has repeatedly denied allegations over personal data concerns.
A tentative arrangement involving Oracle and Walmart was quickly followed by a U.S. Commerce Department announcement of a one-week delay, until Sunday, on enforcing a U.S. ban on TikTok app downloads.
"While much awaits clarification, it's too soon to expect to see what final arrangements the parties will likely agree on," said Shen Yi, a professor and director of the Research Institution of Global Cyberspace Governance at Fudan University in Shanghai.
Should the White House approve the deal, he said, the settlement could be seen as a pullback from the U.S. president's executive order issued in August requiring either a total sale or a total ban.
"The current architecture may achieve a delicate balance among all parties－TikTok retaining control, the appeasement of the White House's security concerns and protecting the interests of U.S. investors," he said.
