President Donald Trump said he has given his approval for Oracle and Walmart to take over TikTok’s US operations of the popular social media app, TikTok. This means that the app loved by US teens won’t be banned after all.
Trump said, “I approved the deal in concept and I have given the deal my blessing.”
A tentative agreement was reached for a new TikTok entity, TikTok Global, part of a partnership with Oracle and Walmart, so the Commerce Department postponed the TikTok ban until September 27th.
Once the TikTok deal is approved, a new company called TikTok Global will be created. The new company would be headquartered in Texas, would hire as many as 25,000 people, and would contribute USD 5 billion toward US education.
After the deal, Oracle will have complete access to TikTok’s source code and updates it can review to ensure no back doors exist. Oracle will take a 12.5 percent stake in a new company, TikTok Global, while Walmart will have 7.5 percent.
As per TikTok Oracle, a software giant would be responsible for hosting user data in the US and ensuring national security requirements are met.
Oracle will provide secure cloud services that satisfy national security concerns of the Chinese-owned app. The company headquartered in the US will provide service to the American users and users in the rest of the world. Four of the company’s five board members will be American.
TikTok is pleased that the proposed deal between the three companies settles questions around the app’s future in the US.
When asked about the deal TikTok said, “We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration.”
The spinout of TikTok’s US operations from its parent company Bytedance in the US was asked for by the Trump administration on the grounds that the company’s data handling policies posed a national security threat.
The US Administration has been trying to limit the operations of several Chinese technology firms as they pose security threats to the country.
President Trump’s order that demanded TikTok’s spinout also called for the suspension of the US operations of the messaging service app WeChat, owned by Chinese technology firm Tencent. The telecommunications and networking technology developer, Huawei was also under the brunt.
Trump’s attacks on TikTok and ByteDance have already taken a toll on the app that has an estimated 100 million users in the US. TikTok CEO Kevin Mayer resigned in late August after just three months of acquiring the position. He told employees that the role signed by him looks different because of the US administration’s pressure on ByteDance to sell its US operations.