Whether it was President Trump’s unconventional negotiating style or political posturing, Trump is tentatively approving a deal between the popular TikTok video social app (ByteDance), Oracle, and Walmart. Americans will have a majority stake in the newly formed company, TikTok Global headquartered in the United States, while Oracle and Walmart will own 20 percent total. Trump said, “I have given the deal my blessing. I approve the deal in concept.” Via executive order, Trump originally threatened to end any future downloads or updates of TikTok beginning at midnight this evening based on non-specific national security concerns.
TikTok has 100 million active users in America, mostly teens, and the issue was becoming political, rather than focussing on national security or business concerns. Some Republicans had concerns cutting off TikTok to so many American households could have repercussions in the November general election.
As a part of the deal, TikTok is creating a new company called TikTok Global that will provide all TikTok services to users in United States and most of the users in the rest of the world. The Trump administration has conditionally approved a landmark deal where Oracle becomes TikTok’s secure cloud provider.
TikTok Global will have four Americans out of the five-member Board of Directors.
All the TikTok technology will be in possession of TikTok Global and comply with U.S. laws and privacy regulations. Data privacy for 100 million American TikTok users will be quickly established by moving all American data to Oracle’s Generation 2 Cloud data centers, which some consider most secure cloud data centers in the world.
“TikTok picked Oracle’s new Generation 2 Cloud infrastructure because it’s much faster, more reliable, and more secure than the first generation technology currently offered by all the other major cloud providers,” said Oracle Chief Technology Officer Larry Ellison. “In the 2020 Industry CloudPath survey that IDC recently released where it surveyed 935 Infrastructure as a Service (IaaS) customers on their satisfaction with the top IaaS vendors including Oracle, Amazon Web Services, Microsoft, IBM and Google Cloud…. Oracle IaaS received the highest satisfaction score.”
Based on decades of experience securing the world’s most sensitive data, Oracle’s Generation 2 Cloud fully isolates running applications and responds to security threats autonomously. This unique technology eliminates the risk of foreign governments spying on American users or trying to influence them with disinformation.
Besides its equity position, Walmart will bring its retail capabilities including its Walmart.com assortment, eCommerce marketplace, fulfillment, payment and measurement-as-a-service advertising service. TikTok Global will create over 25,000 new jobs in the United States, and TikTok Global will pay over 5 billion in new tax dollars to the U.S. Treasury.
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 to teach children from inner cities to the suburbs, a variety of courses from basic reading and math to science, history and computer engineering.
TikTok Global will have an Initial Public Offering (IPO) in less than 12 months and be listed on a U.S. Exchange. After the IPO, U.S. ownership of TikTok Global will increase and continue to grow.
“As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global,” said Oracle CEO Safra Catz. “Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. 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. This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”