The whole issue with US-China over whether to ban TikTok because it’s not a US company or not is over as Oracle and ByteDance had been able to strike a good deal whereby the former will co-own the service as a new corporation on it’s own.
The Financial Times reported that Oracle is planning on taking ownership stake in the newly-formed TikTok corporation as part of the already announced deal.
This doesn’t mean that TikTok will be broken off into a regional service but will create a separate corporate entity for the service in which Oracle will own some stake in the business.
Oracle is also going to make sure that data from American users get stored and processed only within the country based on the recommendations made by the Committee on Foreign Investment in the United States (CFIUS).
While there is little change to the operation of the Chinese-owned short video sharing service whose main headquarter will remain in China, it’s nominal independence from ByteDance will be more pronounced as it’s a new company on it’s own while Oracle’s minority stake isn’t well pronounced but they own a portion of the business.
However, while Oracle’s stake in TikTok makes it a more legal corporation, it is likely that the company will still rely on algorithms and applications created and deployed by the Chinese arm, reports state.
In order to appeal to the US government, TikTok had increased it’s hiring of U.S. tech executives as with the case of the recently departed CEO of the company Kevin Mayer over political interference with the company meanwhile the US Treasury secretary Steve Mnuchin made it known that the deal is a part of a broader effort to establish TikTok as a company that has its headquarters in the US.
Also there could be new agreements which could affect the mode of operations of TikTok in the US as well as addressing the security issues which the US President Donald Trump had claimed is the reason why he wanted the service banned in the first place.
The reason why Oracle struck the deal was basically to prevent the service from being banned in the United States even though the US President is yet to formally approve the deal while crucial details are still being determined according to the Financial Times.