US President Donald Trump has given his approval to the proposed deal between ByteDance, Oracle and Walmart for TikTok’s US operations. The announcement was made on 19 September, a day after the US Commerce Department issued an order prohibiting business with WeChat and TikTok in order to protect national security. The ban on TikTok was subsequently delayed until 27 September, should the deal not go through, Secretary of Commerce Wilbur Ross said.
The agreement will see the establishment of a new company called TikTok Global, possibly headquartered in Texas, with four US directors out of five, plus a likely security expert on the board. Together, Oracle and Walmart would hold 20 percent of the new company, for a still undisclosed price. The final transaction will need to get approval from the relevant US government agencies, as well as from Chinese authorities.
Oracle will take a 12.5 percent stake in TikTok Global and will store the data of US data in its own cloud infrastructure. Oracle CEO Safra Catz said Oracle will quickly deploy, rapidly scale and operate TikTok systems in the Oracle Cloud. The BBC writes that Oracle would have the right to inspect the TikTok source code.
In its own press release, Walmart said it has “tentatively” agreed to buy 7.5 percent of TikTok Global and to enter into commercial agreements to provide its ecommerce, fulfilment, payments and other omnichannel services to TikTok Global. Walmart CEO Doug McMillon will also serve as one of the five board members for the newly created company.
TikTok Global IPO within the year
In addition, TikTok Global will hold an initial public offering (IPO) in the US within the coming year. After the IPO, US ownership of TikTok Global will increase and continue to grow over time.
Walmart said it expects the agreement to bring over 25,000 jobs over time to the US and that TikTok Global will pay over USD 5 billion in new tax dollars to the US treasury.
Also, TikTok Global, together with Oracle, SIG, General Atlantic, Sequoia, Walmart and Coatue, will create an educational initiative to develop and deliver an AI-driven online video curriculum for children from inner cities to the suburbs, with courses from basic reading and math to science, history and computer engineering.
