TikTok seems to have avoided a US ban at the final minute… probably. President Trump has decided to a deal “in concept” (via CNBC) that theoretically allays US security problems while allowing it to operate in the united kingdom. True to earlier discussions, Oracle and Walmart would claim a 20% investment stake in a newly formed TikTok Global company which will run the social video service’s business in america and “the majority of the users” worldwide. Oracle would become TikTok’s “secure cloud provider” and retain American data, while Walmart would wield its advertising and e-commerce technology.
The deal may also see TikTok Global pay over $5 billion in “new tax dollars” to the united states Treasury, and join with Oracle, Investors and walmart like Coatue and Sequoia to launch an AI-powered educational video curriculum. The scheduled program would teach kids basics like math, science and reading, along with more complex subjects like computer engineering.
The new company shall also be asked to have an IPO on a US stock market, and American ownership is likely to “grow as time passes.”
The Commerce Department simultaneously created a window for the potential deal by delaying the ban on TikTok’s app by way of a week, of September 27th before end. TikTok had sued the Trump administration again to avoid the ban already, arguing that it violated First Amendment rights and was motivated politically.
Some areas of the offer caught ByteDance by surprise, Reuters noted – the Chinese firm said on September 20th that it first heard about the training plans simultaneously the offer was announced. It said it had been “committed” to education and works toward the web classroom projects yet.
As TechCrunch warned, though, this arrangement may not address the majority of the key concerns really. ByteDance holds the rest of the 80 percent of TikTok Global reportedly, in accordance with CNBC’s Alex Sherman. If the principle worry was that China’s government could pressure TikTok into spying on American users or spreading misinformation because of its majority Chinese ownership, that’s still an issue now. While US data is better potentially, this deal could be more concerning the appearance of action when compared to a concerted effort to lessen Chinese government influence.