U.S., China power struggle impacts TikTok deal with Oracle, Walmart

Yahoo Finance's Tech Editor Dan Howley joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the latest developments surrounding TikTok.

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ALEXIS CHRISTOFOROUS: Chinese state media has accused the US of, quote, "hooligan logic" in its push for certain conditions in the TikTok deal. And it's casting doubt over whether Beijing will approve the terms. Let's bring in Yahoo Finance tech editor Dan Howley now.

So, Dan, I don't know. Confusion reigns here around this deal. You've got the parent company ByteDance saying they're gonna have an 80% ownership of this US-TikTok Global.

Yet, you've got Oracle saying, no, no. Americans are gonna hold the majority stake. So which is it?

DAN HOWLEY: Yeah. There seems to be a lot of semantics in the end. It-- it looks like it's coming down to who the individual shareholders are for the different companies that will have a stake in TikTok Global. TikTok Global is, of course, what the US operations of TikTok will be.

It'll have processing for user data only in the US. That data will be stored here. It'll create 2,500 jobs in the US.

So this is going to be kind of a new venture almost, the splitting off of the US section. But this is really, like I said, coming down to the semantics of the individual shareholders, where they're based for each company. So for instance, ByteDance is owned by some Americans. There's stakes from Americans and Europeans in there as well as Chinese.

Then there's, you know, the stakeholders who are part of Sequoia Capital, and part of Oracle, and Walmart and basically where they're based. So that's what it's all coming down to, not necessarily what the companies are or where the companies are based. It seems to be that the US is looking at the shareholders while the Chinese are looking at the actual companies themselves.

And that's really where the divide is. So it really, you know, is still all up in the air. And this has been nothing but an unmitigated disaster since it's really come to pass that the US wanted to kind of meddle in the TikTok operation.

BRIAN SOZZI: Dan, are there any dates that investors should pay attention to with regards to potential closing? And I ask that because you look at Oracle shares, you look at Walmart shares, these stocks are trading as if this is a done deal.

DAN HOWLEY: Yeah. I mean, there's still nothing absolutely done here at all. I don't think people should assume that something's finalized or that there will be something finalized, you know, today. What you have to look at is what the US is willing to accept, what China is willing to accept.

The big deal here is that algorithm that runs TikTok is still staying with ByteDance. The US-- Oracle will have no control over it, and now Walmart will have no control over it. It's really just they're getting the stakes and board seats. But ByteDance will still have a board seat on the board for TikTok Global.

It will be four members from the US and then the CEO of ByteDance itself. So this is gonna be a-- still a strange situation. I think everything is still in flux, whether or not it's fully accepted, whether or not TikTok itself and ByteDance fully accept it, and whether or not the Chinese government accepts it.