By John D. McKinnon and Michael C. Bender
WASHINGTON -- Trump administration officials are looking to give American investors a majority share of the company that will take over the Chinese-owned video-sharing app TikTok, according to people familiar with the matter.
That is leading to uncertainty and friction over the contours of the emerging deal to transfer the popular app to a U.S.-based entity, as President Trump has demanded.
ByteDance Ltd., the Beijing-based company that owns TikTok, has sought to retain majority ownership for its proposed partnership with Oracle Corp. in a new U.S.-based company that takes over TikTok operations, The Wall Street Journal reported previously.
That has raised concerns among Senate Republicans and others, who say the proposed technology partnership between ByteDance and Oracle falls short of the full U.S. acquisition sought by Mr. Trump, leaving concerns about the Chinese government's potential access to U.S. user data in the future.
Speaking to reporters late Wednesday, Mr. Trump said he didn't like the idea of ByteDance maintaining a majority stake in TikTok.
"Conceptually, I can tell you, I don't like that," he said, adding that he hadn't been briefed on that element of the deal.
Mr. Trump said that he would be briefed on the TikTok deal on Thursday and that he wasn't prepared to sign off until he receives more information.
Against that backdrop, Treasury Secretary Steven Mnuchin and other U.S. officials and investors have sought to ensure that the U.S. ownership share of the new company reaches well over 50%, according to a person familiar with the matter.
ByteDance is currently about 40%-owned by U.S. investors such as venture firms Sequoia Capital and General Atlantic, that person said. Just under 25% has been held by Zhang Yiming, ByteDance's founder, and around 20% by ByteDance employees, the person said. About 20% has been held by other non-U.S. investors.
Under the new structure being sought by U.S. officials, all of ByteDance's assets would go to the new company. Oracle and Walmart Inc. would become investors as well, this person said, and together these U.S. investors would total more than 50% ownership, under the plan.
But U.S. officials and the American investors want to get the U.S. stake even higher, the person familiar with the matter said, adding that one possible way to do that would be to take the new U.S.-based company public.
TikTok declined to comment on the ownership issue.
The Journal reported on Tuesday that ByteDance would retain a majority stake under the proposal originally submitted to national-security regulators. It couldn't be immediately determined whether that has been amended as part of the review process.
One of the people familiar with the matter said the current proposal under consideration has the consortium of U.S. investors with a majority stake. The differences in how the ownership has been described could stem from differences in how existing U.S. investments in ByteDance are counted.
Both Oracle and Walmart view their investments as a way to better compete with Amazon.com Inc. Walmart also stands to benefit from a partnership with a major consumer platform where it can shift more of its advertising.
Both Chinese and U.S. investors have opposed a 100% sale, as had been considered originally. Chinese investors don't want to be forced into a sale that they believe is less than TikTok is worth, and U.S. investors are wary of taking over all the risk of 100% ownership.
The idea of a U.S.-based company with divided ownership has become a potential compromise. But it remains unknown whether Mr. Trump is willing to compromise on his security concerns.
In an August executive order, the White House effectively gave ByteDance a 45-day deadline to sell or restructure its U.S. TikTok operations or face a ban over the perceived security risk.
The administration contends that the data TikTok collects from U.S. consumers could be shared with the Chinese government. TikTok has said it would never hand over such data.
As part of its proposal, ByteDance would allow Oracle to review TikTok's source code and software to ensure there are no backdoors that allow the Chinese government or other entities to access the data, according to other people familiar with the matter.
Oracle would also regularly check data flows to confirm that data isn't going anywhere it isn't supposed to go, those people said, and U.S. board members would need to be approved by the U.S. government. The board would include a data expert with national-security credentials, those people said.
The Oracle deal was reviewed Tuesday by the Committee on Foreign Investment in the U.S., which weighs business transactions with foreign entities for security concerns. The panel didn't immediately make a recommendation.
Asked about the status of the deal Wednesday, White House chief of staff Mark Meadows said the Trump administration would look to ensure national-security interests were protected.
Another administration official said that "there's a lot of analysis going on" over the particulars of the deal, with security of consumer data on the app and corporate control the key issues, and that top-level administration officials hadn't yet met on the issue as of Wednesday afternoon.
"Security is absolutely crucial," the official said. "That is the No. 1 thing, and probably the second is executive control, board control, ownership control."
In comments last month, Mr. Trump said he also expected the U.S. government to receive money as part of the deal. The official said that demand could be satisfied through the creation of a new TikTok-Oracle venture that would create "a lot of jobs and taxes."
Late Wednesday, Mr. Trump said administration lawyers have informed him the U.S. government couldn't accept payments as a result of the deal.
The administration is also moving quickly, the official said, given a deadline Sunday in which TikTok could be banned if a deal isn't reached.
Senate Republicans said Wednesday that they would be examining the deal closely.
"Any deal between an American company and ByteDance must ensure that TikTok's U.S. operations, data, and algorithms are entirely outside the control of ByteDance or any Chinese-state directed actors, including any entity that can be compelled by Chinese law to turn over or access U.S. consumer data," said the letter, which was signed by Sens. Marco Rubio (R., Fla.), Thom Tillis (R., N.C.), Roger Wicker (R., Miss.), Rick Scott (R., Fla.), Dan Sullivan (R., AK.) and John Cornyn (R., Texas).
Georgia Wells, Alex Leary and Katy Stech Ferek contributed to this article.
Write to John D. McKinnon at email@example.com and Michael C. Bender at Mike.Bender@wsj.com
Corrections & Amplifications
This article was corrected at 8:55 p.m. ET to reflect that Dan Sullivan is a Republican senator of Alaska. The original version of this article incorrectly said Arkansas.