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On Saturday, President Donald Trump approved the deal of Oracle and Walmart’s partnership with TikTok in the U.S., enabling the prevention of its shutdown.
“I have given the deal my blessing — if they get it done that’s great, if they don’t, that’s okay too. I approved the deal in concept.”
President Donald Trump
The U.S. Department of Commerce verified the delay of the prohibition of U.S. transactions with TikTok until next Sunday. Oracle announced that it was chosen as TikTok’s secure cloud provider and will become a minority investor with a 12.5% stake, which TikTok confirmed. Walmart also confirmed that they have tentatively agreed to a purchase 7.5% stake with CEO Doug McMillon as one of the five board members of the newly created company.
TikTok mentioned that it would maintain and expand its headquarters in the U.S. with 25,000 jobs across the country. Trump said a new company would likely be in Texas. Moreover, he said the companies would also make a $5 billion donation for the education fund. Oracle and Walmart announced that TikTok would be responsible for over $5 billion in new taxes to the U.S. Treasury Department. The companies and TikTok investors would build and provide online videos to teach kids about history, science, and other subjects.
According to TikTok and Oracle, last Monday, ByteDance, the Chinese owner of TikTok, already sent a proposal to the U.S. Treasury Department. Based on several reports, the negotiations were about the deal’s precise details, consisting of the ownership stakes of Oracle and ByteDance, and control of the recommendation algorithms TikTok has for material promotion.
Oracle CEO Safra Catz was part of President Trump’s transition team, and Oracle Chairman Larry Ellison held a fundraising event for Trump earlier this 2020. Oracle and Walmart mentioned that U.S. TikTok user data would be transferred to Oracle’s cloud infrastructure, although there is still no definite timeline.
President Trump attempted to ban TikTok in the U.S. before and make ByteDance sell the app’s U.S. assets. The Chinese government consequently updated export restrictions to now cover “recommendation of personalized information services based on data analysis.” TikTok’s app feeds on recommendation systems to get videos to show individual users.