United States President, Donald Trump has approved the deal between TikTok’s parent company, ByteDance, and Oracle (ORCL) following his threat to ban the Chinese-owned app which accotding to him poses a national security threat because of its ties with China.
It should be recalled that the Department of Commerce confirmed in a recent statement that it would stall an order to remove TikTok from Apple and Google’s US app stores till September 27 in a bid to give the companies more time to finalise the deal’s details.
According to a source familiar with the issue, ByteDance still remains the majority owner of TikTok under the agreement approved by Trump.
While speaking with reporters at the White House recently, Trump said he had given his “blessing” to a partnership between TikTok and US firms Oracle and Walmart.
He said: “I have given the deal my blessing. If they get it done, that’s great. If they don’t, that’s okay, too.”
Trump said the deal will also include Wal-Mart (WMT) and added that “the security will be 100 percent. They’ll be using separate clouds and very, very powerful security.”
Trump said further that the deal would also include a $5 billion fund for US education, and that TikTok would be incorporated in Texas as a new company.
In a statement, TikTok confirmed that Oracle and Walmart will together hold up to a 20% share.
The statement read: “As part of this proposal, Oracle will become our trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied.
“We are currently working with Wal-Mart on a commercial partnership as well. Both companies will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company. We will also maintain and expand TikTok Global’s headquarters in the US, while bringing 25,000 jobs across the country.”
While confirming the deal in a statement, Oracle CEO, Safra Catz said: “As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global.”
“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world. This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”
Also, Walmart confirmed the deal in a statement and disclosed that Wal-Mart CEO Doug McMillon would serve on its five-member board.
Walmart said: “We are excited about our potential investment in and commercial agreements with TikTok Global.”
Walmart added that it will also “enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global.”
