TikTok-Oracle deal: Here’s everything you need to know about it
"I have given the deal my blessing...I approve the deal in concept," President Trump said as he gave his approval to the TikTok-Oracle deal
It has been a busy couple of weeks for ByteDance. Over the past couple of weeks, the company that owns the popular short-video sharing app TikTok has been busy negotiating a deal that would salvage its business in the US and enable its users in the country to continue using the platform.
ByteDance, ever since the US President imposed sweeping bans on US transactions on the company, has been working feverishly in carving out a deal that would allow the China-based company to hold a minority stake in TikTok’s US business while addressing the concerns raised by the Trump administration over the app posing a security threat to the US people.
It held negotiations with Microsoft, whose bid it later rejected. “ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft...We are confident our proposal would have been good for TikTok’s users while protecting national security interests,” Microsoft said in a statement shortly after ByteDance rejected its proposal.
ByteDance also held negotiations with Oracle, which eventually helped the company to close a deal before the deadline for the sanctions imposed by the Trump administration came into effect, that is, September 20.
"I have given the deal my blessing...I approve the deal in concept," President Trump said as he gave his approval to the historic deal. The deal, however, is yet to get approval by authorities in China, where ByteDance is based.
TikTok, on Thursday, announced that it was partnering with Oracle and Walmart in order to address the concerns raised by the US authorities and make the platform available to the users in the country. As a part of the deal, TikTok will become TikTok Global, a technology company that is based in the US. Oracle will be TikTok Global’s trusted technology partner. It will also be responsible for hosting the company’s US data and securing all the associated computer systems such that it addresses all the concerns raised by the local authorities.
ByteDance is also working on a deal with Walmart over a commercial partnership. Both the companies, that is Oracle and Walmart, in a TikTok Global pre-IPO financing round wherein the two companies combined will be able to acquire a 20% cumulative stake in the company. Existing ByteDance investors such as Sequoia Capital, General Altantic and Coatue Capital will also be able to participate in the pre-IPO financing round.
Additionally, TikTok Global will set up a headquarter in the US and bring nearly 25,000 jobs across the country.
While announcing the deal, TikTok’s Interim head Vanessa Pappas penned a note wherein she informed the users that the popular video-sharing platform wasn’t going anywhere. She also thanked the users for their support. “We want to thank all of the members of our community who have shown tremendous support...TikTok is what it is because of all of you...This is just the beginning for TikTok, and we're so excited to be with you in this journey for the long run,” she wrote in a blog post.