TikTok's deal with Oracle & Walmart gets Trump's approval (ban averted, for now)

Monday, September 21, 2020 by Robinhood Snacks |
_TikTok's new parents: Oracle, Walmart, and Bytedance investors (in that order)_

TikTok's new parents: Oracle, Walmart, and Bytedance investors (in that order)

Could write a 7-volume series after this ends... If it ever ends. The TikTok ban saga has dramatically reversed course (again). In August, President Trump said he would ban TikTok unless an American company acquired its US operations by September 20th (aka: yesterday). The concern is that TikTok's Chinese-owned parent Bytedance could pass American data to the Chinese government.

  • A week ago: TikTok chose Oracle over Microsoft as its American partner (read: not owner). Trump wants an American company to own a majority of TikTok, so it was unclear whether he'd sign off.
  • On Friday: Sounded like no. Trump said TikTok downloads and updates would be banned starting yesterday. Then...
  • On Saturday: Trump approved the Oracle deal, giving it his "blessing." TikTok would partner with Oracle and Walmart to create a US-based company called “TikTok Global” (ironic).

Deep breaths... The ban on US TikTok downloads will be delayed to September 27 — but it could be scrapped altogether if the partnership moves forward. Here's the deal:

  • Oracle would get a 12.5% in TikTok Global and would store its data on the Oracle cloud in the US.
  • Walmart would get a 7.5% stake and provide ecommerce and other online-shopping-related services.
  • Bytedance keeps 80% ownership. Buuuut: since US venture firms own 40% of Bytedance, TikTok Global would technically have majority American ownership.
  • The US gov would get 25K new US jobs at a TikTok HQ. Also: a potential TikTok Global IPO on an American stock exchange for even more US ownership.

TikTok Global would be the new TikTok... The TikTok we know and love/hate isn't allowed in China. China has Bytedance's Douyin, the non-international (censored) version of TikTok. The international TikTok is already banned in its largest market of India, and has faced scrutiny from Europe, Canada, and others. If this US-based TikTok Global is formed, they'll all probably get on it.