US President Donald Trump has expressed his approval of a deal that would allow Chinese-owned video-sharing app TikTok to continue operating in the US.
Mr Trump told reporters he had given his “blessing” to a partnership between TikTok and US firms Oracle and Walmart.
The president had ordered the app to be banned in the US, citing national security concerns. US security officials fear data collected by TikTok’s owner may be handed to the Chinese government.
TikTok’s owner, ByteDance, has denied accusations that it is controlled by or shares data with China’s ruling Communist Party.
#WeAreTikTok and we are here to stay! pic.twitter.com/AaA8OhpvGx
— TikTok US (@tiktok_us) September 19, 2020
On September 19, Mr Trump said the deal would ensure the data of the estimated 100 million Americans who use the app was safe, telling reporters: “The security will be 100%.”
“I have given the deal my blessing,” Mr Trump said as he left the White House ahead of an election rally in North Carolina. “I approve the deal in concept.”
President Trump’support for the deal comes days after his administration said it would bar people in the US from downloading Tik Tok through any app store from Sunday.
Hence the US Department of Commerce decided that it is postponing TikTok ban until September 27. The decision was taken as the US President gave green-signal for the Oracle-Tik Tok deal.
Oracle will be TikTok’s “trusted technology provider,” meaning Oracle will house the entity’s data in its U.S. servers — a boon to a cloud computing business that has lagged behind those of Amazon.com Inc., Alphabet Inc. and Microsoft.
It will also get access to monitor TikTok’s source code and algorithms.
Walmart Chief Executive Officer Doug McMillon will sit on Tiktok Global’s board and is discussing a commercial partnership with TikTok.
TikTok Global will likely be headquartered in Texas and will hire at least 25,000 people, Trump said, without mentioning a timeline for those hires.
ByteDance would retain a majority stake in TikTok’s assets and control the closely guarded algorithm that determines what clips users see.
The new company will hold an initial public offering in about a year.
Oracle Corp. is the winning bidder for a deal with Tik Tok’s US operations, after main rival Microsoft Corp. announced its offer of the video app was rejected.
However, the deal still needs to get the approval of China, where ByteDance. is based.
Oracle plans to take a 12.5% stake in a round of financing that would precede an IPO
TikTok also said that together, Oracle and Walmart Inc. could end up with as much as 20%.
The new company, called TikTok Global, will seek a U.S. IPO and raise a pre-IPO round of financing.
Existing Bytedance investors that could participate in the pre-IPO round include Sequoia Capital, General Altantic and Coatue Capital.
A host of other companies made proposals or considered bidding. Microsoft Corp. was rebuffed because it wanted to control all of TikTok in the U.S., a condition that didn’t sit well with Beijing.
