ByteDance Ltd, the Chinese owner of the popular video-sharing app TikTok, is set to retain a majority ownership stake in its app unit as part of an agreement it has reached with business software and consulting services firm Oracle, The Wall Street Journal reported.
Just one day ahead of the deadline that U.S President Donald Trump set for ByteDance to divest TikTok’s US operations or risk being blacklisted in America, Beijing-based company confirmed that it has accepted a partnership offer from Oracle on TikTok’s US operations.
The US Treasury Department announced on Monday (Sep 14) said that the Trump administration will conduct a comprehensive national security review of the agreement.
According to WSJ report, Oracle will come on board as U.S. technology partner of TikTok, while ByteDance will continue to retain a majority ownership stake in TikTok’s global business. A separate company based in the U.S. will own TikTok but it will remain a unit of Bytedance with Oracle picking up a minority stake in that company. The new entity will have an independent oversight and maintain an arms-length from Bytedance
Bytedance will move data on American users of Tiktok to Oracle’s cloud-computing infrastructure and house that information only in the US.
Bytedance will also retain control of TikTok’s powerful predictive algorithms which is widely viewed as providing critical edge to the Chinese app.
While the proposed deal falls short of President Donald Trump’s preference for outright acquisition by U.S Technology player, it seeks to address Trump’s concerns by promising to create 25,000 U.S.-based jobs and highlight the potential tax revenue the new company would generate in future years.
The proposed agreement could also win the approval of the Committee on Foreign Investment( Cfius). Comprising officials from the Treasury, State, Commerce and other departments, Cfius can block deals on national security considerations
As you are no doubt aware, Swarajya is, all in all, a reader-subscription-backed business model and in order to make sure we build a media platform with only the best interests of India at heart, we need your backing.
And in challenging times like this, we need your support now more than ever—to continue bringing you stories that are often shrugged off.
For us to invest in quality reporting and continue bringing you the right stories, it takes a lot of time and money.
Partner with us, be a patron or a subscriber. We need your support, throughout.