After going through months of tension regarding the usage of TikTok in the US, there seems to be closure. Trump signs deal for TikTok that allows Oracle Corporation and Walmart Inc. to take over the China-based ByteDance produced the app.
TikTok has been in the news for all the wrong reasons in the past couple of months. The Trump government wanted to ban the usage of this app due to security reasons. In all probability, it is a tool to get the personal information of users and also the reason why India banned TikTok a few months back.
Trump stops ban of TikTok and signs deal for collaboration
As TikTok has a massive craze in the US and also keeps many employed, the government is in negotiating terms. Finally, Trump announced that he has signed the deal and gave his “blessing.” He said if the Chinese company is okay with the agreement, they can go ahead with it. If they reject the deal, then also it is okay.
As soon as Trump stated this, the Commerce Department informed that they would delay the ban of the app. As decided earlier, the TikTok app would have been banned for updates and downloads after Sunday at 11:59 pm. The ban has been postponed to September 27, depending on the deal between the US-China companies.
Deal proposed by Oracle and Walmart
A statement was released by Oracle stating that they will have a 12.5% stake in the new venture called TikTok Global. It will offer secure cloud services to keep data safe on the video app.
Walmart has agreed to buy 7.5% shares of TikTok Global and also that they will enter into commercial agreements. If all goes as planned, the app might soon be used for e-commerce purchases, payments, and more.
ByteDance Ltd. is the current owner of the app and will remain 80% of owners of the company. However, ByteDance is already 40% owned by US investors. So, the new deal will make the app have American ownership in the majority.
Safra Catz, the Oracle Chief Executive, said that the company is confident about its capability to deliver a secure environment for the app and ensures data privacy to all users across the world.
Walmart CEO Doug McMillon will be one of the five board members in the new company. He said that the company would work towards an initial public offering in the US within one year to bring more ownership to the American citizens. The partnership will help Walmart to expand its reach.
Out of five board members of TikTok Global, four members will be Americans, as stated by Oracle and Walmart. However, they have not shared the names as yet.
Retaining TikTok will promote growth and economy of the US
One of the spokeswomen from TikTok said that the company is delighted that people who have chosen the app as their career will benefit for years to come. She also noted that TikTok has given many families a means of earning through the pandemic and entertained many others.
The backers of the upcoming company were all working against the given deadline of 11:59 pm, September 20. Until that time, they knew that the app was going to be banned from downloads and updates.
The change of plan will offer 25,000 jobs to Americans – mostly for people in Texas. He also said that the new company will have the name of TikTok but “will have nothing to do with China.”
Educational initiative by Oracle and Walmart
Trump said that Walmart and Oracle plan to set up $5 billion as funds for the education of young Americans. On Saturday, a joint statement was sent out from Walmart and Oracle. It states that the US investors for TikTok Global and ByteDance include General Atlantic and Coatue, and Sequoia Capital. These two companies plan to start an education initiative that will provide an online video curriculum driven by artificial intelligence.
The statement shares that TikTok Global will pay over $5 billion to the US Treasury. However, it didn’t give more updates on the period, further plans, and so on. We have to wait for more updates on this statement to get a better idea.
The negotiation of TikTok operations in the US seems to get closure soon, benefiting Americans. They will not only stay entertained but also get job opportunities that are at the all-time low during the pandemic.
Once the national-security threat concerns are overtaken, and the app is in safe hands, the operations will be more comfortable. However, the Chinese company and the government denied any claims related to data theft.
Oracle has beaten several other big companies like Twitter Inc. and Microsoft Corp., to acquire the app. Walmart was already onboard and will be moving forward.