Media mogul Barry Diller told CNBC on Tuesday that Oracle and Wal-Mart’s acquisition of a minority stake in TikTok was “really a clerical error”.
Expedia and IAC Chairman Diller made comments in the “Squawk Box” interview days after President Donald Trump agreed to approve the transaction with the Chinese owner of the viral video sharing app.
Diller said: “It’s obviously very simple-say we want to protect the safety of Americans through the use of TikTok from anything that might happen.”
He added: “The whole thing is a tank.”
The terms of the TikTok transaction have been evolving since Trump issued an executive order in early August, which gave TikTok 45 days to sell to a US company or face a ban from Washington. The initial demand was that an American company completely acquired TikTok. The joint bid between Microsoft and Wal-Mart is considered the most likely competitor.
But at the last minute, China added restrictions on its technology export list to include algorithms such as TikTok. TikTok must focus on closing a deal that will give only a small number of shares in the US company.
Diller said of the widespread impact of the chaotic negotiations: “Once you start throwing grenades against protectionism, once you start turning these issues into political issues…the race will inevitably continue to rise and prevent natural trade, which is impossible. Avoided.”
According to the new terms, all Microsoft acquisition offers were rejected, and Oracle and Wal-Mart cooperated to bid for a minority stake. In the version of this transaction that Trump has agreed to approve, Oracle will obtain 12.5% ownership and provide cloud and security services. Wal-Mart will acquire 7.5% ownership and board seats, and will develop the e-commerce functionality of the application. Investors in parent company ByteDance (including US, Chinese and international investors) will retain most of the shares.
The transaction still needs to be approved by the Chinese government, which must obtain permission from ByteDance to sell TikTok’s algorithms and AI technology to American companies.