US software company Oracle acquires 12.5% stake in Byte Dance, the Chinese parent company of mobile app TikTok.
The TikTok deal gives Oracle a 12.5% stake in the platform and a 7.5% stake for Walmart.
- The deal comes a day before the deadline to ban TikTok downloads in the United States.
- Meanwhile, the deal gives Oracle a 12.5% stake in the platform and a 7.5% stake for Walmart.
- The agreement stipulates the creation of a new company called TikTok Global.
- But the new agreement will ensure that US data cannot be accessed overseas.
President Donald Trump on Saturday approved an agreement between Byte Dance, the Chinese parent company of mobile app TikTok, and Oracle, a US software company.
Also, US-based Walmart will take a minority stake in the initiative. The deal comes a day before the deadline to ban TikTok downloads in the United States. A one-week extension is allowed to wash the details.
Minority role in TikTok
Despite President Trump’s opinion that TikTok should be wholly American, Byte Dance will maintain 80% ownership stake.
Meanwhile, the TikTok deal gives Oracle a 12.5% stake in the platform and a 7.5% stake for Walmart. But the deal leaves much of its operational control to its US partners.
The agreement stipulates the creation of a new company called TikTok Global, which is headquartered in the United States. Also, four of TikTok Global’s five board seats will go to Americans.
As mentioned in Trump’s August executive order, although the deal did not hand over full control of the company to an American buyer, the president told reporters that he had “blessed” the deal.
“If they do, it’s the best,” Trump said . “If they don’t, that’s fine too.”
From Beijing – based Byte Dance to the US-based company, the entire colleague around TikTok sales was born with data concerns. As a Chinese company, Byte Dance is at the mercy of the Chinese Communist Party, which fears that the Trump administration could access US user data at any time.
But the new agreement will ensure that US data cannot be accessed overseas, leaving Byte Dance with a majority right. Oracle said it would host all data associated with US users on its cloud platform.
TikTok confirmed in a statement that Oracle is “responsible for hosting all user data from the United States and securing associated computer systems, to ensure full satisfaction of US national security requirements.”
“We are also currently working on a business partnership with Walmart,” the statement added.
“Both companies are participating in the IPO financing round in front of TikTok Global, in which they will be able to acquire a 20% overall stake in the company. We will maintain and expand TikTok Global’s headquarters in the United States, while bringing in 25,000 jobs nationwide.”
Safra Cruz, Oracle’s chief executive and a friend of President Trump, has doubled her commitment to data privacy.
“Oracle is going to deploy TikTok systems in the Oracle Cloud, quickly and operate them. We are 100% confident in TikTok’s ability to provide TikTok with an extremely safe environment and to provide TikTok’s US and global users with data protection. This significant improvement in security and privacy will allow all staking parties to benefit from the continued fast growth of the TikTok user community. ”
All parties involved have until September 27 to finalize the plan.