China’s ByteDance Ltd is seeking a valuation of US$60 billion for TikTok as Oracle Corp and Walmart Inc take stakes in the short-video app’s business, according to a person familiar with the matter.

Oracle and Walmart have rights to buy 12.5 percent and 7.5 percent respectively of a newly established TikTok Global under an agreement that won the approval of US President Donald Trump, the person said, asking not to be named discussing private negotiations. The two companies would pay a combined US$12 billion for their stakes if they agree to that asking price.

ByteDance said on Monday that it will own 80 percent of TikTok Global, a newly created US company that will own most of the app’s operations worldwide

The final valuation had not been set as the parties worked out the equity structure and measures for data security, the person said. Terms are still in flux and the proposed valuation could still change. Beijing also has yet to approve the deal, though regulators are said to favor any transaction in which ByteDance maintains control of its valuable recommendation algorithms and other proprietary technology.

ByteDance said on Monday that it will own 80 percent of TikTok Global, which will own most of the app’s operations worldwide. Oracle and Walmart, which have agreed to take stakes in TikTok Global of 12.5 percent and 7.5 percent respectively, had said on Saturday that majority ownership of TikTok would be in American hands.

ByteDance in its statement on Monday said it was a “rumor” that US investors would be TikTok Global’s majority owners and that ByteDance would lose control over TikTok. Oracle declined to comment on ByteDance’s statement, while Walmart did not respond to a request for comment.

ByteDance was pressured into a deal for TikTok when Trump threatened to ban the app in the US citing national security concerns. After Microsoft Corp made a proposal for a full buyout of the service, ByteDance instead turned to Oracle’s offering in which the Chinese parent will maintain a solid majority stake.

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The valuation for TikTok has been a looming question as Washington and Beijing clashed over the negotiations. The service for the US market alone has been estimated to be worth US$20 billion to US$50 billion, or even more. Snap Inc, for context, trades at a US$35 billion valuation.

ByteDance, the Beijing-based parent company, is the most valuable private startup in the world at US$140 billion, according to market researcher CB Insights. The TikTok Global deal does not include the app’s China twin, Douyin, which has become an enormous hit in its own right.

Under the current proposal, there will be five seats on the board of TikTok Global. Walmart Chief Executive Officer Doug McMillon will become a director, the retailer said in a statement. TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said. It will need to hire thousands of content moderators, engineers, and marketing staff that were previously located in China and around the world.

TikTok Global intends to hold an initial public offering within 12 months, Oracle and Walmart said. And Trump said Saturday he wants US$5 billion from companies creating the new TikTok venture for an education fund that would teach American children “the real history of our country.”

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TikTok plans to use proceeds from its IPO for the US$5 billion grant, a person familiar with the matter said. ByteDance first heard about education fund payment from news reports, a company spokeswoman said.

The current plan for TikTok Global does not involve any transfer of algorithms or technologies, and Oracle will be able to inspect TikTok US' source code, ByteDance said Monday. This is akin to US companies such as Microsoft Corp sharing their source code with Chinese technology experts, ByteDance added.

“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud,” CEO Safra Catz said in a statement. “We are a 100 percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users.”

With inputs from Reuters