Oracle/TikTok Deal, Which is Also Set to Include Walmart, Being Assessed by White House Officials

While reports suggest that the White House will approve Oracle’s proposal to become a ‘trusted technology partner’ for ByteDance-owned TikTok in the US, the popular video app could still be banned if President Donald Trump decides to veto the deal.

That’s what’s at stake at the moment, with US officials now going over the particulars of the arrangement, which, at this stage, appears to allow ByteDance to retain ownership of TikTok, though a separate US board would be appointed for the company, and new provisions would be put in place to separate US data from the Chinese Government.

That, according to some, does not meet the original requirements of the White House Executive Order, which called for a complete divestment from ByteDance in order to clearly separate the app from the Chinese-owned company. But various complications have arisen within the negotiation process, including the Chinese Government implementing new rules which ban the sale of technological advancements within foreign trade deals.

That may have changed the trajectory of the TikTok discussions, and eventually pushed Microsoft out of the running. But according to the latest reports, Oracle will indeed be able to access and use TikTok’s source code under the revised terms of their agreement.

According to the latest info:

• The Treasury Department sought major revisions to security clauses within the TikTok/Oracle term sheet on Wednesday night
• Oracle is expected to become a 20% owner of TikTok – whether that’s just for the US, or the app overall, is unclear at this stage
• Walmart is expected to partner with Oracle in the final deal. Walmart expressed its interest in purchasing TikTok last week, and is believed to be particularly keen on tapping into the app’s eCommerce potential, which has been a big winner for the Chinese version of the app
• A new ‘TikTok Global’ group will file for an IPO in the US next year, further establishing operational separation of the app.
• Interestingly, The New York Times also notes that Instagram co-founder Kevin Systrom is in the running to become the CEO of the new TikTok entity. No further details as yet, but Systrom’s inside knowledge of Facebook could certainly be of major benefit.

What all this means for TikTok in the end is hard to say, but clearly, all the parties involved in the final arrangement will be looking to make back their investment, in different ways.

Will that lead to more functions being added to the app? A mass advertising push, or a rapid acceleration of its eCommerce tools? 

Will that then change the TikTok experience?

There is, of course, a risk that companies with no social media experience, and billions to recoup, will clutter the app with promotional content – but, seemingly, ByteDance has little choice but to agree to the new partnerships either way. And you would hope that, in an arrangement where the new owners are able to work with ByteDance, that they would be able to map a stable, sustainable growth path for the app.

Only time will tell – and of course, this only matters if the final deal is approved by President Trump, which will happen, according to The White House, within the next two days.

Many expect that Trump’s personal relationship with Oracle CEO Larry Ellison will play a big part in this. Given their mutual respect, it seems that Trump will take a more lenient view on the deal, even if it doesn’t exactly meet his initial demands for the separation of the app. 

As such, it still does appear that TikTok will remain in operation for US users. 

Things could change again, but after weeks of intense negotiations, it does seem that TikTok will live to fight another day.