President Donald Trump said he has approved Oracle’s bid for TikTok “in concept”. In August, Trump threatened a de facto ban. He has approved this bid less than a day before the ban was set to go into effect.
Trump has given the deal his blessing and approved the deal “in concept”. He gave reporters this statement outside the White House on Saturday as he left for a rally in North Carolina.
The Commerce Department issued an order on Friday, to block transactions with TikTok parent companies ByteDance and WeChat. This went into effect September 20th but for TikTok, this order is set to go into effect on November 12th. The company expects this to halt the app’s operations.
The new company, called TikTok Global, would be based in the United States and headquartered in Texas. It would take over processing and storage for all US-based TikTok users, and would hire up to 25,000 people.
Trump said this would contribute $5 billion toward the US. education, according to reports. They’re going to be setting up a very large fund, that’s their contribution he’s been asking for, the president added.
How the oracle’s bid addresses Trump’s security concerns, wasn’t clear on Saturday, though. Commerce Secretary Wilbur Ross said the ban will be delayed a week, until September 27th at 11:59 PM.
China has to Sign off on any Transaction
They express relief that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the US Administration. And that they can settle questions around TikTok’s future in the US. This was a statement from a TikTok spokesperson in an email on Saturday.
Additionally as part of the deal, Oracle will become TikTok’s trusted technology provider. It will be responsible for hosting all US user data, and securing associated computer systems, according to the spokesperson.
They are currently working with Walmart on a commercial partnership. A Walmart spokesperson said, however, final agreements are still in the works. So far, there has been a tentative agreement to purchase 7.5 percent of TikTok Global.
The company has also tentatively agreed to enter into commercial agreements. That is to provide their ecommerce, fulfillment, payments and other omni channel services to TikTok Global.
To serve as one of the five board members of the newly created company will be Walmart CEO Doug McMillon. The company would work toward an IPO in the US within the next year, the spokesman added.
Aside from becoming TikTok’s cloud technology provider, Oracle would also become a minority investor in TikTok Global. It would quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. This was a statement from Oracle CEO Safra Catz in a press release on Saturday.
They are a hundred percent confident in their ability to deliver a highly secure environment to TikTok. They can ensure data privacy to TikTok’s American users, and users throughout the world, Catz added.
TikTok will also maintain and expand TikTok Global’s headquarters in the US. This is aside from bringing 25,000 jobs across the country as part of the deal.
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