Apparently capping the simmering tensions with China, U.S. President Donald Trump has approved a deal for Oracle Corporation and Walmart to acquire stakes in the U.S. operations of popular video app TikTok.
This has postponed a potential ban that was scheduled to go into effect on Septmenber 20.
U.S. software giant Oracle will possess a 12.5 percent in TikTok’s global business and will give secure cloud services that satiate the national security concerns about the Chinese-owned app. Retail behemoth Walmart will also take 7.5 percent stake in the company.
Earlier, Chinese multi-national internet technology company, ByteDance was racing to avoid a crackdown on TikTok after the U.S. Commerce Department remarked that it would block new downloads and updates to the app on September 20.
Voicing concern, the U.S. officials had said that the personal data of as many as 100 million Americans that use the app was being passed on to China’s Communist Party government. Bytedance has denied such accusations.
Trump signed an executive order on Aug. 14 giving ByteDance 90 days to sell TikTok. The deal announced on Saturday, however, is structured as a partnership rather than a divestment.
Previously, Bytedance was eyeing a valuation of $60 billion for TikTok as Oracle Corporation and Walmart got stakes in the short-video app’s business to address the U.S. security concerns. The two companies would pay a combined $12 billion for getting their stakes if they agree to that asking price of $60 billion.
ByteDance had also agreed to generate 25,000 new U.S. jobs at TikTok, a surge from a little over 1,000 now.
On August 14, Trump had signed an executive order giving ByteDance 90 days to sell TikTok.