In a surprise move, Oracle and Walmart have come together to save TikTok from the ban, forming a new company called TikTok Global which will be headquartered in the US. President Donald Trump said he has given the deal his blessing.
According to a report in NPR.org, the arrangement appears to satisfy the White House’s concerns over the security of American users’ data.
Oracle and Walmart said in a joint statement on Saturday that the new company would be “majority owned by American investors”.
Oracle announced it was chosen as TikTok’s secure cloud provider and will become a minority investor with a 12.5 per cent stake.
Walmart said it has tentatively agreed to a purchase 7.5 per cent stake in TikTok and CEO Doug McMillon would serve as one of the five board members of the newly-created company, reports CNBC.
The parent company ByteDance will own the remaining 80 per cent of TikTok, according to reports.
“However, because 40 per cent of ByteDance is owned by US venture capital firms, the Trump administration can technically claim TikTok Global is now majority owned by the US money,” the report said.
Talking to reporters, Trump said: “I have given the deal my blessing. I approve the deal in concept”.
“It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal. The security will be 100 per cent. They’ll be using separate clouds and a lot of very, very powerful security”.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US administration and settle questions around TikTok’s future in the US,” ByteDance said in a statement.
TikTok has nearly 100 million active monthly users in the US.
The company has averted the Sunday ban with the announcement of the deal in nick of time.
The US Commerce Department said on Friday that as of Sunday, any moves to distribute or maintain TikTok on app stores such as Apple App Store and Google Play Store will be prohibited, and a more extensive ban against the app would be applied from November 12.
US President Donald Trump and some politicians have repeatedly expressed speculation that TikTok poses a national security threat to the country, though no evidence has been provided to support the allegations.
On August 6, Trump issued an executive order banning US transactions with ByteDance, citing the International Emergency Economic Powers Act. The ban will take effect on September 20.
On August 14, he signed a second executive order that will force ByteDance to sell or spin off its US TikTok business within 90 days.