Oracle will take a 12.5% stake of TikTok Global
The controversial video-sharing platform has chosen Oracle as its new cloud provider
Oracle has been named as TikTok’s new stakeholder and cloud provider in a deal set to preserve the video-sharing platform presence in the US.
The partnership will see Oracle take a 12.5% stake in TikTok Global - a newly-created company that will be headquartered in the US and own most of the app’s operations worldwide.
In a statement issued over the weekend, Oracle CEO Safra Catz said that “as a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global.”
“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud," Catz added.
US conglomerate Walmart stated that it has “tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global”.
Oracle and Walmart also announced that four out of the five board of TikTok Global directors will be Americans.
Speaking to reporters, president Donald Trump said that he had given the deal his “blessing”, before adding that TikTok Global would be “totally controlled by Oracle and Walmart”, despite the two companies only planning to operate a joint 20% of the stock.
The president’s claim has already been rebuked by TikTok’s parent company ByteDance. Reuters reported that the Chinese tech giant had denied rumours that US investors would be TikTok Global’s majority owners, which would make ByteDance lose control over TikTok.
In a statement on Twitter, TikTok named Oracle as its “trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied”. It added that TikTok Global would create 25,000 jobs in the US.
Although the deal is still subject to approval by Chinese and US governmental bodies, the deal is likely to secure TikTok’s presence in the US.
Late last week, the US Commerce Department issued an order that would ban people in the US from downloading TikTok and WeChat starting 20 September. However, a magistrate judge managed to block the order on the grounds of the US Constitution's first amendment, which guarantees free speech.
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