Walmart will have a 7.5%, while Oracle will acquire 12.5% of the video sharing platform.
Walmart said in a statement, as part of the deal, Oracle will serve as TikTok’s “secure cloud technology provider” and Walmart will be a commercial partner by entering “into commercial agreements to provide our e-commerce, fulfillment, payments and other omnichannel services to TikTok Global,”.
Based on a statement made by both Oracle and Walmart, on U.S. exchange both companies will create a new company which is TikTok Global, that will go viral in nothing less than 12months.
However, the deal has to be formally approved by U.S regulators, but President Donald Trump said he is okay with the deal and gives it is blessing, though it still not line up with what Trump initially said that TikTok to be sold completely to a U.S. company.
The new entity would likely to be incorporated in Texas and include a “$5 billion contribution” for a “large fund” for the “education of American youth,” but both Oracle and Walmart referred to it as “5 billion in new tax dollars to the U.S. Treasury”, so it is unclear where specifically the money is going.
“combine its secure cloud technology with continuous code reviews, monitoring, and auditing to provide unprecedented assurance that U.S. TikTok user data is private and secure” oracle said in the press release. Of recent Bloomberg had reported that Oracle will get full access source code and updates to ensure that any security backdoors to access data from the app’s U.S. by the platform’s Chinese’s parent cannot be added.
The proposal by oracle faced a pushback last week, from the Republican Lawmakers including Sen. Jo’s Hawley (R-MO) who wrote an open letter to reject the deal on national security grounds to the Treasury Department. Sen. Marco Rubio (R-FL) and a group of other Republican lawmakers had also written to Trump asking him to reject any kind of deal that would allow “China-based or controlled entities to retain, control or modify the code or algorithms that operate any U.S.-based version of TikTok.”
Over the data of American Users, the white house has targeted TikTok that the Chinese government may force them to hand it over, though TikTok has recently said it will not comply with such a request from the Chinese government.
The proposed deal will also require approval from Beijing, TikTok’s Chinese parent ByteDance had said on Thursday, apart from the U.S. government. The AI technologies—including ‘‘personalized content recommendation” tools like the one used by TikTok, the Chinese government added it to its export controls list, effectively necessitating the Beijing’s approval for any deal.