US President Donald Trump has approved a deal between TikTok’s parent company, ByteDance, and computer technology giant, Oracle, after threatening to ban the Chinese-owned app over claims that it poses a national security threat because of its Chinese ties.
US Department of Commerce confirmed this in a statement on Saturday evening, September 19, adding that it would delay an order to remove TikTok from Apple and Google’s US app stores to September 27, giving the companies more time to finalise the details of the deal.
This comes three days after United States announced that the downloads of popular Chinese-owned video app, TikTok and use of the messaging and payment platform, WeChat, would be banned from Sunday, September 19.
The move comes amid rising US-China tensions and efforts by the Trump administration to engineer a sale of TikTok to American investors.
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In the new deal, ByteDance will continue to be majority owner of TikTok under the agreement Trump said he approved, according to US officials.
Trump speaking with reporters on Saturday stated;
I have given the deal my blessing — if they get it done that’s great, if they don’t that’s okay too. I approved the deal in concept.
Reuters reported that the new company will have a majority of US directors, a US chief executive, and a security expert on the board.
Shortly after Trump‘s comments, Oracle announced it was chosen as TikTok‘s secure cloud provider and will become a minority investor with a 12.5% stake.
TikTok confirmed Oracle’s role and said it is working with multinational retail company, Walmart on a commercial partnership.
Walmart said it has tentatively agreed to a purchase 7.5% stake, and CEO Doug McMillon would serve as one of the five board members of the newly created company, Tiktok Global.
A Walmart spokesperson in a statement said;
In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens.
ByteDance will own the remaining 80% of TikTok, according to a person familiar with the matter. However, because 40% of ByteDance is owned by US venture capital firms, Trump administration can technically claim TikTok Global is now majority owned by US money.
TikTok expressed that it will maintain and expand its headquarters in the US, while bringing 25,000 jobs across the country.
Trump said the deal will also include a $5 billion fund for US education, and that TikTok would be incorporated in Texas as a new company.
He said;
They’re going to be setting up a very large fund. That’s their contribution that I’ve been asking for.
Oracle CEO Safra Catz in a statement expressed;
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.
