TikTok released a statement Thursday that its parent company ByteDance has reached a rudimentary agreement with Oracle and Walmart after months of confrontation between the hit short video app and the White House over national security concerns. The three parties will work out a cooperation agreement as soon as possible in accordance with the laws of China and the United States. The deal was already given tentative approval “in concept” by US president Donald Trump, according to CNBC. ByteDance had also voluntarily withdrawn the lawsuit against US President Donald Trump and the Commerce Department for the TikTok ban executive order, according to legal documents.
After Microsoft was struck out of the bidding game, US software maker Oracle is joining hands with retail giant Walmart to form a new entity called TikTok Global, which will be headquartered in the United States. The plan will allow ByteDance to be the majority shareholder of the new entity, while Oracle and Walmart would claim a 20% investment stake. TikTok Global will run the app’s business in the US and as well as some other regions around the world. Oracle would become TikTok’s “secure cloud provider” and hold on to American data, while Walmart would wield its e-commerce and advertising technology.
ByteDance will start a pre-IPO round of financing for its currently wholly-owned subsidiary TikTok Global to involve Oracle and Walmart, and will start the agenda to go public in an effort to make the company more transparent.
The newly formed board of directors will include Arthur Dantchik, president and founder at Sig Asia Investment LLLP and also a member of ByteDance’s board; William E. Ford, CEO of General Atlantic and also a member of the ByteDance board; Walmart CEO Doug McMillon; an executive from the American operations of TikTok and ByteDance founder Zhang Yiming, Zhang being the only Chinese director.
ByteDance said the current plan would involve no transfer of valuable algorithms or technology. At the same time, Oracle will be authorized to check the source code of TikTok US. In the same statement, ByteDance said a $5 billion payment reportedly to be made to the US Treasury by TikTok Global is based on estimated income and other taxes the company will need to pay over the next few years. The company also denied the rumor that TikTok is to start a $5 billion educational fund in the US.