On Saturday President Donald Trump said he has approved a pact in theme in which Oracle and Walmart will team up with the viral video-sharing app TikTok in the U.S, allowing the popular video-sharing app to prevent the ban.
President Trump on Saturday told the reporters at the Whitehouse, he has given his blessings to the deal, if they get it done he us okay with it, if they don’t that’s fine too.
Trump was not happy with Oracle’s original proposal
The commerce department announced the delay of the ban of TikTok downloads and it’s updated in the United States, which was supposed to start from 20th September. The ban is now set to take effect from September 27th, with a resident Trump giving a green signal to the deal.
Looks like, Trump wasn’t a fan of Oracle’s initial proposal, according to the original proposal TikTok would have been the majority stakeholder in the new entity. Trump responded to the plan saying, “theoretically, I can tell you I am not a fan of that,” last week. On Friday, the app will effectively stop functioning on November 12, unless TikTok reaches a deal with a U.S. company, thus alleviating the administration’s national-security concerns. A TikTok spokesperson responded saying that the company is disappointed by the actions and reassuring its commitment to fighting the “unlawful order from the executive.”
Ownership in the new entity
Oracle said in a statement that it would have a 12.5% stake in the new entity called TikTok Global, and would provide secure cloud service for data on the popular app.
Walmart said it had agreed to purchase 7.5% of TikTok Global as well as entering into commercial agreements to provide e-commerce, fulfillment, payments and other services to the new company.
TikTok’s current owner, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the company, according to people familiar with the situation. But because ByteDance is about 40% owned by U.S. investors, the new company with equity stakes for Oracle and Walmart can be described as having majority American ownership, they said.
“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,” Oracle Chief Executive Safra Catz said in a statement.
Walmart said its CEO Doug McMillon would serve as one of five board members of the newly created company.
“In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens,” Walmart said. “This partnership will provide Walmart with an important way for us to expand our reach.”
In all, four of TikTok Global’s five board members will be Americans, according to Walmart and Oracle, which didn’t immediately name the other members.
A TikTok spokeswoman said the company was “delighted that the individuals who’ve turned their creativity on TikTok into thriving careers, the small businesses using TikTok to reach customers during the pandemic, and the families who’ve found joy and connection through our platform will be able to use TikTok for many years to come,” she said.
The new alterations by the President and how it benefits the United States
The president said the agreement will result in the creation of 25,000 jobs, mostly in Texas, adding that the new company will still be called TikTok and “Will have nothing to do with China. He added that Oracle and Walmart are planning to set up a $5 billion fund for the education of young Americans. He didn’t offer further details. In a joint statement late Saturday, Oracle and Walmart said that they, TikTok Global, and ByteDance’s U.S. investors including Sequoia Capital, General Atlantic and Coatue, plan to create an educational initiative to provide an artificial intelligence-driven online video curriculum teaching a range of subjects. The statement also said that TikTok Global “will pay more than 5 billion in new tax dollars to the U.S. Treasury.” It didn’t say over what period or otherwise elaborate on the planned payment.