TikTok parent company ByteDance is resolving US President Donald Trump’s attempt to ban the Chinese social media giant in the US by making TikTok’s global arm a US-based business.
This is according to the Financial Times, which reports that TikTok will become a company headquartered in the US, with ByteDance becoming majority shareholder.
Oracle, which had been among the companies bidding to purchase TikTok’s US operations, will also invest as a minority shareholder. Under the agreement, Oracle is also taking shares in TikTok globally.
The FT also reports that Walmart, which had previously bid for ownership of TikTok US with Microsoft, will become a minority shareholder.
The move comes as the initial deadline for Trump’s executive order is passed, which required ByteDance to divest its US business by 15 September or face a ban.
TikTok US company will give Oracle the data, while ByteDance keeps the algorithm
The establishment of the global arm of TikTok as a company headquartered in the US is designed to enable the social media brand to continue operating in the country while complying with the order, which primarily focused on concerns surrounding data privacy.
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Wary of Chinese government interference, Trump had sought to prevent ByteDance from processing TikTok user data, which this new approach resolves. Oracle will independently process all TikTok user data globally, with data from US residents all being handled within the country.
Meanwhile, it also resolves ByteDance’s unwillingness to sell part of TikTok – and therefore the algorithm that keeps users engaged with content, and which is arguably its most valuable asset.
The FT reports that under the agreement, ByteDance will retain all ownership and control of the algorithm.
The new approach of making TikTok a US company has not yet been officially announced by any party, but is an elegant solution to what is becoming an increasingly fraught situation, in which TikTok has become the latest battleground for the US and China.