To save TikTok from the ban, Oracle and Walmart have come together, forming a new company named TikTok Global that will be headquartered in the US. President Donald Trump has said he gave his blessing to the deal.
Trump announced on Saturday that China-based ByteDance, TikTok’s parent company, has been tentatively approved for a deal with the US government to resolve the outstanding issues, now including Oracle and Walmart investing together to acquire 20 percent of the newly formed TikTok Global business.
Oracle reported that it has been selected as the stable cloud provider for TikTok and will become a minority investor with a 12.5 percent stake. Walmart said it had tentatively agreed to buy a 7.5% stake in TikTok and its CEO, Doug McMillon, will serve as one of the newly formed company’s five board members. ByteDance parent company would own TikTok’s remaining 80 percent.
“TikTok Global will be majority-owned by U.S. investors, including Oracle and Walmart. TikTok Global will be an independent U.S.-based corporation with four Americans from the five-member board of directors,” Walmart and Oracle said in a joint statement.
“Trump said, talking to reporters,” I gave my blessing to the agreement. I agree with the principle of the agreement.
“It’s not going to have anything to do with China, it’s going to be secure, it’s going to be part of the agreement. The security is going to be 100 percent. They’re going to use different clouds and a lot of very, very strong security.”
TikTok Global will be in control of all of the TikTok technologies and will comply with US laws and privacy regulations. Data privacy for 100 million American TikTok users will be easily built by migrating all American data to Oracle’s Generation 2 Cloud data centers, the world’s most secure cloud data centers, the firms said.
Walmart said it would put its omnichannel retail capabilities in addition to its equity stake, including its Walmart.com collection, eCommerce marketplace, distribution, payment, and advertisement service measurement-as-a-service.
“TikTok Global will produce more than 25,000 new jobs in the United States and pay the US Treasury more than $5 billion in new tax dollars”
With the deal, in the nick of time, TikTok averted the Sunday ban. The US Department of Commerce said on Friday that any moves to distribute or retain TikTok on app stores such as the Apple App Store and the Google Play Store will be blocked as of Sunday, and a more stringent ban on the app will be enforced as of November 12.
Though no evidence has been given to support the claims, US President Donald Trump and some politicians have repeatedly expressed speculation that TikTok poses a national security threat to the country.
Trump signed an executive order on 6 August prohibiting US transactions with ByteDance, invoking the International Emergency Economic Powers Act. The ban is set to take effect on September 20. He signed a second executive order on August 14, which will force ByteDance within 90 days to sell or spin off its US TikTok business.
“We are pleased that the proposal by TikTok, Oracle, and Walmart would answer the US administration’s security concerns and resolve questions about the future of TikTok in the US,” ByteDance said in a statement.
In less than 12 months TikTok Global will have an Initial Public Offering ( IPO) and will be listed on a US Exchange.