President Trump on Saturday said he approved "in concept" a deal whereby TikTok will be allowed to continue operating in the U.S., with Oracle as its "trusted technology partner."
Why it matters: TikTok has nearly 100 million U.S. users, and is still growing fast. Trump has threatened to ban it, due to data privacy concerns related to TikTok's ownership by Chinese tech company
What he's saying: "I have given the deal my blessing — if they get it done that's great, if they don't, that's okay too," Trump told reporters at the White House before departing for an evening rally in North Carolina. "I approved the deal in concept."
- Trump noted the new company would be headquartered “most likely in Texas,” and could see "at least," 25,000 people hired.
What TikTok's saying: "We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. Administration and settle questions around TikTok's future in the U.S."
Flashback: ByteDance originally formed TikTok via its acquisition of Musical.ly in 2018, but that deal received renewed U.S. national security attention beginning last November.
- One major concern was a Chinese government rule whereby China-based companies are required to turn over user data to the government upon request.
- TikTok maintained that it stored U.S. data locally, with a backup in Singapore, and that its data is not subject to Chinese law.
- U.S. political criticism of ByteDance, from a data privacy perspective, has been bipartisan. Several lawmakers also expressed doubts about the proposed deal with Oracle.
Context: Trump in early August threatened to ban TikTok were it not sold by Sept. 20. Shortly after, the Committee on Foreign Investment in the U.S. (CFIUS) ruled the Musical.ly deal must be unwound by mid-November.
- ByteDance originally was in talks to sell TikTok's U.S. operations to either Microsoft or Oracle.
- Those talks broke down after the Chinese government implemented new tech export rules that would have prevented TikTok's recommendation engine (i.e., its algorithm) from being included.
The state of play: ByteDance informed Microsoft over the weekend that it opted for a workaround arrangement with Oracle, whereby Oracle would be TikTok's "trusted technology provider in the U.S."
- Oracle also was working with Walmart, which previously worked with Microsoft. The goal would be to add e-commerce functionality to TikTok, which currently generates relatively little U.S. revenue.
- ByteDance subsequently submitted its proposal to CFIUS, and received redlined revisions on Wednesday. ByteDance agreed to most of the revisions, presumably with Beijing's blessing.
The bottom line: It appears that TikTok lives.
Go deeper: Inside TikTok's killer algorithm