TikTok has narrowly avoided being banned in the U.S. thanks to a new deal between the video-sharing platform and two American companies: Oracle and Walmart. U.S. President Donald Trump is said to have “approved” the deal and gave it his blessings.
Under the deal, Oracle and Walmart will jointly claim a 20% investment stake in the newly formed TikTok Global company. The newly minted company will be headquartered in the state of Texas in the U.S. where it is said to bring 25,000 jobs in the country. TikTok Global is also set to run the social video service’s business in the U.S. and “most of the users” worldwide.
Oracle will become TikTok’s “secure cloud technology provider” and it will take over the processing and storage of all U.S.-based TikTok users. Walmart is also working on a commercial partnership with TikTok.
TikTok said in a statement to The Verge, “We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.”
Following the announcement of the deal between the companies, the U.S. Commerce Department delayed the ban on TikTok’s app by a week, until the end of 27 September. The order was said to have been taken due to “positive developments”.
Trump claimed the deal would also see the setting up a USD 5 billion (~RM20.5 billion) education fund which took TikTok’s owner Bytedance by surprise. The Chinese firm said on 20 September that it first heard of the education plans at the same time the deal was announced. Nevertheless, the company said it was “committed” to education and would work towards the online classroom project.
On Friday the Trump administration announced that it would ban TikTok and WeChat from US app stores starting Sunday.
Following the supposed ban, many U.S, users rushed to download the app. According to estimates from mobile app tracker Sensor Tower, downloads for the app rose 12% to 247,000 in the U.S. on Friday compared to the previous day.
TechCrunch did however note that despite there being a new deal, this new arrangement does little to address the key concerns expressed by Trump himself. That is to say, if the U.S.’ national security concerns about that China’s government would pressure TikTok to spy on American users, this has yet to be solved. In fact, the video-sharing platform’s owner ByteDance still holds 80% of TikTok Global’s shares, giving it a controlling stake.
Though U.S. data seems to be more secure now under the new arrangement, the entire deal is quite pointless as it was designed to give the appearance of action taken rather than reducing the Chinese government’s influence on the company.