Just hours before downloads of the controversial TikTok app would be banned in the United States, Vanessa Pappas, interim head of TikTok, announced on Saturday that the company has reached an agreement with Oracle and Walmart that will keep the video-sharing platform running in the country. Bloomberg reports U.S. President Donald Trump had given his approval to the deal.
A new company will be formed, called TikTok Global, and Oracle and Walmart will together have up to a 20% stake in the new entity. TikTok Global will be headquartered in the United States and will bring 25,000 jobs to the country. Papas said Oracle will store all user data, helping ensure U.S. users’ data privacy. The company will also be allowed to review TikTok’s current source code and that of any subsequent updates.
We’re pleased that today we’ve confirmed a proposal that resolves the Administration’s security concerns and settles questions around TikTok’s future in the US. Our plan is extensive and consistent with previous CFIUS resolutions, including working with Oracle, who will be our trusted cloud and technology provider responsible for fully securing our users’ data. We are committed to protecting our users globally and providing the highest levels of security. Both Oracle and Walmart will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company. We will also maintain and expand the US as TikTok Global’s headquarters while bringing 25,000 jobs across the country.
The deal was signed at the midnight hour, just before the U.S. Commerce Department was set to ban new downloads of TikTok. Bloomberg reports the ban on TikTok has been delayed by a week after President Trump gave his initial seal of approval of the proposal.
While the initial ban was set to include both TikTok and WeChat, it is uncertain at the current time if the latter app, which is owned by China’s Tencent Holdings, will still be banned from U.S. app stores on Sunday.
President Trump in August signed an executive order giving China-based ByteDance 90 days to sell its TikTok business in the United States, citing evidence of possible national security threats. In the order, the Trump administration claimed there is “credible evidence” to suggest ByteDance “might take action that threatens to impair the national security of the United States.”