TikTok creator ByteDance has received tentative approval for an agreement with the U.S. government to resolve the outstanding issues about the involvement of China’s government in the original organization, which will allow Oracle and Walmart in partnership to acquire 20% of the newly formed TikTok Global business.
In a joint statement from the two acquiring companies, Walmart maintained that, while there is still work to do on final agreements, it has tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide e-commerce, fulfillment, payments and other omnichannel services to the new company. Doug McMillon, Walmart’s CEO, would serve as one of five TikTok Global board members. In addition, Walmart indicated that it would work toward a TikTok Global initial public offering in the U.S. at some point over the next year to bring more ownership to American citizens. However, Walmart acknowledged that the final transaction would require approval from relevant U.S. government agencies.
Walmart noted that the partnership would provide means to expand the company’s reach, serve omnichannel customers and grow its third-party marketplace, fulfillment and advertising businesses.
In the joint statement, Walmart and Oracle pointed out that TikTok Global would be responsible for providing all TikTok services to users in the U.S. and most users in the rest of the world. TikTok Global will be majority owned by Oracle, Walmart and other U.S. investors, and operate as an independent American company. It will be headquartered in the U.S., with four Americans serving on the five-member board of directors. TikTok Global will possess all TikTok technology, and comply with U.S. laws and privacy regulations. Oracle will become TikTok’s secure cloud provider. To ensure data privacy for 100 million TikTok users in the U.S., data will quickly move to Oracle’s Generation 2 Cloud data centers, the partners pointed out, insisting that the technology eliminates the risk of foreign governments spying on Americans through the social media channel or trying to influence them with disinformation.
As it begins operations, TikTok Global, together with Oracle, SIG, General Atlantic, Sequoia, Walmart and Coatue will establish an educational initiative to develop and deliver an AI-driven online video curriculum available for children learning in any setting, one that will feature a variety of courses from basic reading and math to science, history and computer engineering.
With the agreement in place, and the government’s decision not to ban the social media channel, at least for now, TikTok Global will provide a hundred million Americans with access to a service they enjoy, and, the partners asserted, spark much needed competition in the social media sector.