TikTok to be a separate company; partly owned by Oracle
Everything with TikTok's American businesses and the Donald Trump administration ultimately culminated in a deal between Oracle and the ByteDance-owner of TikTok
Everything with TikTok's American businesses and the Donald Trump administration ultimately culminated in a deal between Oracle and the ByteDance-owner of TikTok. The Financial Times report says, Oracle plans to take an ownership stake in a newly formed TikTok corporation as part of the already announced deal.
Reports suggest that the new deal will not break TikTok regionally, but will create a separate corporate entity for the app in which Oracle will own a minority stake. Oracle will also ensure that US user data is stored and processed in the US, per the recommendations of the Committee on Foreign Investment in the United States (CFIUS).
TikTok is already based in China, and there is nominal independence from ByteDance's operation in China. The main change the deal will bring is Oracle's minority stake in the company. It is not yet clear how small the bet will be.
However, while Oracle's participation in TikTok makes it a more legal corporation, the company is likely still reliant on algorithms and applications created and implemented by the Chinese arm, according to reports.
TikTok has also committed to increasing hiring within the US Treasury Secretary Steve Mnuchin said in an interview with CNBC that the deal is part of a broader effort to establish TikTok as a company that has its base in the United States.
It's also unclear whether the new agreement will lead to changes in the way TikTok essentially operates or whether it will meaningfully address security concerns raised by the Trump administration.
Announced Sunday, Oracle's deal is part of a last-minute effort to prevent TikTok from being banned in the United States. Trump has not yet formally approved the agreement and, as per the Financial Times, crucial details are still being worked out.