(Hypebot) — Mere days after the Department Of Commerce announced plans to bring down the axe on TikTok’s neck, we dig into the deal with Oracle and Wal-Mart that may save the social media app.
THE LATEST: President Trump has now said that he will veto the deal if Oracle and Walmart don’t have majority control of TikoTik in the US and TikTok has gone to court to stop the app ban altogether, claiming freedom of speech issued and more.
Guest post by James Shotwell of Haulix
Just days after the US Department Of Commerce announced plans to ban TikTok, the social media app lives on thanks to a potential sale.
TikTok is fully operational in the United States as of today, September 22. The social media app, which was set to be banned last Sunday, was spared its untimely fate thanks to a last-ditch effort from Oracle and Wal-Mart to purchase the company over the weekend. President Trump has approved the sale in principle, but conflicting reports from the companies involved leave many questions unanswered.
According to Variety, virtually every person and every company involved in the acquisition of TikTok disagrees on the terms of this deal. The deal approved by Trump allegedly makes Oracle the cloud provider and host of TikTok. That means the company will move its data stateside, and that U.S. citizens will control the data.
Bytedance, the parent company of TikTok, whose Beijing headquarters are at the center of the platform’s controversy, disagrees.
What isn’t disputed: Oracle plans to take a 12.5% stake, and Walmart will get 7.5% in pre-IPO equity in TikTok Global. The new company will be based in the U.S. and run on the Oracle Cloud platform. ByteDance will continue to maintain control over the A.I. algorithms that power the TikTok app’s video recommendations (and which ByteDance uses for the similar Douyin app, available in China). The deal values TikTok at as much as $60 billion, according to reports by the Wall Street Journal and Bloomberg News.
Trump previously claimed the only adequate deal would be one where a US-controlled TikTok. ByteDance claims it will retain majority control, as it believes the remaining 80% of pre-IPO equity belongs to them, but that might not be true.
To make sense of this, Music Biz News host James Shotwell put together a video explaining how we got here and what may happen next.
James Shotwell is the Director of Customer Engagement at Haulix and host of the company’s podcast, Inside Music. He is also a public speaker known for promoting careers in the entertainment industry, as well as an entertainment journalist with over a decade of experience. His bylines include Rolling Stone, Alternative Press, Substream Magazine, Nu Sound, and Under The Gun Review, among other popular outlets.