Tiktok owner Bytedance is said to be seeking a valuation of $60bn for Tiktok’s US operations, after a partnership with Oracle and Walmart was approved by the Trump administration late last night.
Through the creation of a new entity called Tiktok Global, software giant Oracle will take a 12.5 per cent stake and manage the storage of its data in the cloud to appease US security concerns.
Retail giant Walmart said it would take a 7.5 per cent stake, leaving Chinese tech firm Bytedance with the remaining 80 per cent.
That majority stake will be funded partly by US venture capital firms, allowing the White House to shrug off criticism about Bytedance’s continued involvement in the company.
Oracle and Walmart are said to have a combined $12bn for their stakes on a $60bn asking price for Tiktok, a person familiar with the matter told Bloomberg.
The approved deal calls off a ban that was to be imposed on new downloads of Tiktok in the US from today, but does not stay the executive order against Chinese messaging app Wechat.
The final valuation for Tiktok Global had not been set before the deal was announced as the companies negotiated the equity structure and measures for data security, the news wire reported.
Tiktok Global is destined to go public in the US as the dust of the political storm surrounding its creation settles. The deal will include a headquarters for Tiktok Global in the US, which the company said will create 25,000 jobs.
US President Donald Trump said yesterday he supports the deal in principle, despite his earlier executive order which demanded Bytedance divest the video app’s US operations completely.
“We are pleased that the proposal by Tiktok, Oracle, and Walmart will resolve the security concerns of the US administration and settle questions around Tiktok’s future in the US,” a Tiktok spokesperson said overnight.
“As part of this proposal, Oracle will become our trusted technology provider, responsible for hosting all US user data and securing associated computer systems to ensure US national security requirements are fully satisfied. We are currently working with Walmart on a commercial partnership as well.”
“Our team works tirelessly to provide a safe and inclusive platform and we’re thrilled that we will be able to continue serving our amazingly diverse and creative community.”