The TikTok-Oracle deal could finally go through
Latest doubts regarding national security concerns seem to have been solved.
TikTok is now planning an IPO without the sale of its parent company ByteDance in a deal that would include American software giant Oracle as the responsible partner for US data and Walmart as vague capacity. The deal hasn't yet been approved by Washington or Beijing, and both TikTok and WeChat will be banned from U.S. app stores starting Sunday. The deal is currently under scrutiny by the Trump administration and appears to be a compromise agreement that will avoid selling ByteDance to an American company, as Trump previously called for. But there's another interesting twist in the ongoing debacle that plays into the U.S. elections and helps Trump significantly: he's got TikTok and an extension of operations through November 12th. In other words, while in the United States no new users will be able to download TikTok as of Sunday, TikTok in the United States will continue to operate unimpeded until November 12 - to survive the elections. This achieves two things: Firstly, it lets Trump avoid a highly unpopular action against an insanely popular app during a heated election campaign. Second, there's time for TikTok to clean up the intricacies of a potential deal with Oracle to the government's taste. In the form in which the new proposed deal stands, ByteDance would remain the majority shareholder in TikTok, according to an unnamed source quoted by CNN. Oracle would host TikTok user data to allay national security concerns that the company is releasing American data to the Chinese government. WalMart's potential role here is unclear, even though the company may only act as an e-commerce partner. Following the pending deal, TikTok's board of directors would need to be approved by the US government and include a data security expert with top secret security clearance, according to the same CNN source. That, too, should raise privacy concerns among the American public. In this way, an insanely popular and equally frivolous short video app has become the focal point of a global war for balance of power. This data is a gold mine and everyone wants to control it. It goes well beyond a national security threat. The Chinese authorities also have to agree to the deal. On August 28, China imposed new export controls on algorithms like TikTok's in a thinly veiled attempt to prevent ByteDance from being sold to an American company. Back then, Microsoft was the big dog in the race to acquire TikTok, considering it's all very fluid. These new export controls could still make it difficult to pull through this deal in its latest proposed form. So, with China trying to prevent the deal and Trump making vague statements, it is unclear whether it will move forward at all. Trump only commented that ByteDance would remain the majority shareholder: "Conceptually, I can tell you that I don't like that". According to Reuters, Trump told reporters on Thursday, "We're making a decision. We spoke to Walmart, Oracle today. I suspect Microsoft is still involved," Trump told reporters at the White House before leaving to visit Wisconsin . And Treasury Secretary Steve Mnuchin is reportedly the great force pushing for this new compromise deal with Oracle, despite criticism from lawmakers and possibly Trump himself, according to the Washington Post. So what role would Microsoft play? No one seems to know outside of Trump's proposal that somehow there is still skin and hair in this game. Business Insider reported that Microsoft "insulted" the owner of TikTok earlier during the bidding process. If the deal hits, TikTok could go public in the U.S. within 12 months, and Business Insider claims it would consider Instagram co-founder Kevin Systrom as its CEO. But it's unlikely to be a bulwark against perceived national security threats, Weifeng Zhong, a senior research fellow at George Mason University, told the NPR, noting that the proposed structure could give ByteDance an opportunity to overrule Oracle.