The preliminary agreement for the social network TikTok to continue operating in the United States results in the creation of a new company called TikTok Global in which Oracle and Walmart will acquire a 20% stake, according to a joint statement from the two U.S. companies.
Under the agreement, TikTok will create a new company called TikTok Global which will provide TikTok services to users in the United States and “most users in the rest of the world,” while Oracle becomes TikTok’s cloud provider.
The agreement also stipulates that TikTok Global “will be the majority property of U.S. investors, including Oracle and Walmart,” which will be an independent U.S. based company with four Americans out of the five members of the Board of Directors.
The U.S. government announced this Saturday that it will delay for a week the implementation of measures against China’s social network TikTok, which were to come into force on Sunday after US President Donald Trump gave his “blessing” to a preliminary agreement so that it can operate in the country.
Trump stressed that Oracle and Walmart would partner with TikTok, “security would be 100%, they will be employing separate clouds and very powerful security, and will be making a $5 billion contribution in education.”
According to the Walmart and Oracle statement, TikTok Global will create more than 25,000 new jobs in the United States and pay more than $5 billion in U.S. Treasury taxes.
TikTok Global, along with Oracle, SIG, General Atlantic, Sequoia, Walmart and Coatue will create an online educational initiative for American children, from basic reading from Maths to science, history and computer engineering.
As for security, the agreement states that “all TikTok technology will be in the possession of TikTok Global and will comply with US privacy laws and regulations,” security that Trump also referred to when discussing the agreement.
TikTok’s data security for 100 million Americans will be 100% assured, moving to Oracle’s second-generation cloud data centers “the safest in the world.”
According to the statement, “This unique technology eliminates the risk of foreign governments spying on US users or trying to influence them with disinformation.”
“In light of recent positive developments, U.S. Secretary of Commerce Wilbur Ross, under President Trump’s leadership, will delay the ban on transactions identified in Executive Order 13942, related to the TikTok mobile app, which would have entered into force on Sunday, September 20, 2020, until September 27, 2020, at 11:59 p.m.”, Department noted in a statement.
“We’ll see if it happens or not, but conceptually I think it’s a great deal for the US,” Trump said.
In a statement posted on its website, TikTok notes that the joint proposal with Oracle and Walmart “will resolve the security concerns of the US Administration“, as well as “doubts about the future of TikTok” in the country.
In the statement, TikTok states that “Oracle will become our trusted technology provider” and it will be “responsible for hosting all US user data” as well as for fully meeting US national security requirements”.