Trump Gives a Green Light to TikTok-Oracle
For the past weeks, the TikTok frenzy constantly topped technology news. Last week, Oracle was officially declared as the “winning bidder” of the coveted deal.
Much to the surprise of many spectators who expected an outright divestment, ByteDance found a way to survive without igniting the ire of the United States nor China.
The Chinese technology firm awarded Oracle a minority stake of the newly established firm called “TikTok Global.” It advances to move the company’s headquarter to the US.
Similarly, one of the unprecedented bidders, Walmart, will also get a sizeable stake of the pie. This leaves Microsoft Inc to desolation.
The Nasdaq frontrunner reportedly offended CEO Zhang Yiming after referring to TikTok as a national security threat it could repair.
Oracle will be awarded a minority stake of 12.5% in the newly-formed firm. Consequently, the grocer giant Walmart will take 7.5%. Four out of five keyboard members will be American.
Both of the American companies confirmed their participation in the deal and will take part in the venture’s pre-IPO rounds to take up to a 20% cumulative stake in the firm.
Walmart said that TikTok Global would be offered to the public as early as the next twelve months.
The settlement came just in time for the bell. The ban of new downloads is scheduled to take place September 20th should the company fail to reach concession.
Fair enough, the Chinese government will have its say on the deal. Even when Trump already gave his signal, the sale will still undergo the scrutiny of China.
Oracle Will Oversee “Some” Operations But Not All
The overall course of TikTok now lies in the country’s hands, which has the second-biggest economy in the world.
Oracle will be a critical player for TikTok global as it will be securing the platform’s cloud computing services in a way that will satisfy previous national security concerns.
Its provision of computing services to the video-sharing app will strengthen its campaign towards its long-term prospect of becoming a cloud computing heavyweight.
This can potentially put the firm on the map to rival some of the industry’s frontrunners, notably Amazon.com Inc. and Microsoft Corp.
Earlier, US intelligence agencies asserted that the Communist Party of China collects American users’ data through TikTok. This made the app under the scrutiny of a national security concern.
Trump confirmed his blessing of the TikTok-Oracle deal in his campaign in North Carolina. He said that he approved the agreement in “concept.”
According to reports, Oracle will have full access to the modern technology app’s source codes and updates to ensure that no backdoor penetration could occur.
Source codes are the basis for applications and software. The inspection of these channels commonly occurs to address local data security concerns.
In response, the Chinese government also said its willingness to cooperate in the deal. As long as ByteDance does not give up the artificial intelligence algorithms supporting it. This has been the firm’s key driver behind its growth.
In a statement released today, ByteDance adheres to China’s request and confirms that it will not transfer algorithms and technologies to Oracle as part of the “current plan.”
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!