TikTok has been at the centre of multiple controversies in recent times. The American government has been threatening to ban TikTok if it does not sell its U.S. business to an American company. Microsoft and Oracle were the most serious companies in discussions with TikTok over a possible deal. However, a few days ago, Microsoft confirmed that it did not reach a positive conclusion with TikTok. Oracle on the other hand confirmed that it has an agreement with TikTok which is subject to the U.S. government’s approval. The deal does not involve selling TikTok and no royalty will be paid to the U.S. government.
According to recent reports, the U.S. President stated that he has “in principle” agreed to the solution received by the U.S. government regarding TikTok. The program does not involve technology and algorithm transfer. “I have already expressed my blessing to this deal…I agreed to this deal in principle”, Trump told reporters when he left the White House yesterday for a campaign rally in Fayetteville, New Carolina.
Recall that the Tiktok’s ban and its removal from the PlayStore were supposed to take place at the end of today. However, it appears that this acceptance “in principle” will allow US users to continue to use the Chinese short video app. Nevertheless, there is still a need for a final and formal agreement of all parties.
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TikTok finally found a way out
No one thought that Zhang Yiming (ByteDance CEO) and his team have a third way out. We all thought that it will either be sell or get banned. The current deal involves Bytedance, Oracle, and Wal-Mart. The three parties will work together to meet the requirements of both the U.S. and China.
TikTok’s headquarters will remain in the United States, and Oracle will become TikTok’s partner in data security compliance. The latter will provide cloud architecture services for U.S. users. TikTok will not transfer its technology or algorithm to Oracle.
According to TikTok, it will create over 25,000 jobs in the next few years to support rapid business development. The company claims that it will not only “make money”, it will also integrate into American society.
TikTok, Oracle, and Wal-Mart now in business
TikTok will start a new round of financing of no more than 20% in the same period. Oracle and Walmart will potential investors with first-hand rights. The two companies will invest a total of 100 billion yuan ($12.5 billion) in this round of financing. After the completion of this round of financing, TikTok’s post-investment valuation will reach nearly 500 billion yuan ($62.5 billion). At the same time, Bytedance will continue to control TikTok. However, Oracle and Wal-Mart will be its “local partners” in the US market.
Oracle’s founder and chief technology officer, Larry Ellison, said: “Oracle Cloud Infrastructure will empower TikTok’s next phase of development. It will also ensure that the company’s business adheres to the most stringent security standards.” TikTok, Oracle, and Walmart will join hands to promote the development of the next global internet giant.
Doug McMillon, CEO of Walmart said “Walmart is very pleased to work with Bytedance and Oracle to build TikTok into a more popular service application in the United States. We look forward to the final completion of the transaction. We want to serve our customers and create more jobs.”