The uncertainty over TikTok’s future in the US market continues as the company was unable to reach an agreement with Oracle and Walmart. The ban on TikTok, which was supposed to go into effect from the 20th, has now been pushed out to the 27th.
The Purported Deal between TikTok, Oracle, and Walmart
The deal, which was tentatively approved by the President, states that Oracle will own a 12.5% stake in TikTok Global and provide cloud computing services as well. Walmart, on the other hand, will own a 7.5% stake in the company and provide e-commerce and payment related services.
If the deal had materialized, American investors would have had total control over TikTok Global, since they already own nearly 40% of ByteDance, which is the parent company of TikTok.
The deal was designed to achieve two objectives.
- To make sure TikTok’s data is stored securely in the US
- To make sure that ByteDance does not have any control over TikTok Global
The Trump administration has repeatedly claimed that TikTok poses a threat to national security, since the data could be accessed by the Chinese government. TikTok, however, has vehemently denied these allegations and has stated that it would not share user data with the Chinese government under any circumstances.
TikTok-Oracle-Walmart Deal Hangs in the Balance
The deal which has been proposed by Oracle and Walmart still needs to be approved by the Chinese government. If it is not approved by the 27th of this month, the app will be banned from US app stores.
Already, many users who are unsure about TikTok’s future in the US market have migrated to other apps like Instagram, YouTube, and Reels.
TikTok has already been banned in India, which is yet another huge market for the company. So, many experts believe that the company might have no option but to agree to the deal proposed by their US counterparts.