A deal between TikTok, Oracle and Walmart has been approved by US President Donald Trump.
The deal is not a complete sale of TikTok’s US operations, as had been suggested, rather it will see the creation of a new US-based company named TikTok Global.
Oracle and Walmart will own 20 per cent of TikTok Global, according to The New York Times.
Of that 20 per cent stake, Oracle will hold 12.5 per cent, with Walmart taking the remaining 7.5 per cent.
Oracle will sign on as TikTok’s cloud provider, while Walmart says it is looking at ways to improve its eCommerce offering with the app.
Oracle has said its cloud technology can alleviate the security concerns that have followed the video-sharing app in recent months.
“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud,” said Oracle CEO Safra Catz.
“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.”
ByteDance, the company that owns the app, will continue to hold an 80 per cent stake in the company.
According to CNBC reporter Alex Sherman, the Trump administration is calculating the deal as “majority US” due to the fact 40 per cent of ByteDance’s ownership in the US is venture capital funding.
Oracle and Walmart have said TikTok Global will create more than 25,000 new jobs and pay $US5 billion in tax.
“I have given the deal my blessing,” Trump said. “I approve the deal in concept.”
The deal also means a proposed ban of TikTok in the United States will not go ahead.
TikTok was quick to celebrate the deal, with interim CEO Vanessa Pappas releasing a video claiming “#WeAreTikTok and we are here to stay”.
#WeAreTikTok and we are here to stay! pic.twitter.com/AaA8OhpvGx
— TikTok US (@tiktok_us) September 19, 2020
“We’re thrilled to share that we are working with a US tech partner to ensure that TikTok can continue to provide a home to each and every one of you,” she said.
