More clearly about the Oracle – TikTok deal: TikTok will be an independent company with Oracle shares

The new Financial Times report is giving a clearer look at the Oracle-TikTok deal.

According to the report, the new agreement between the two companies does not make TikTok completely territorial, but will become a completely separate enterprise entity for the application, and Oracle will take a small stake in there. Oracle will also ensure US user data is stored and processed in the US, as recommended by the US Foreign Investment Commission (CFIUS).

Currently TikTok is headquartered in California, with nominal independence from the operations of the company ByteDance in China. The main change after the deal is that now Oracle will have a small stake in the company, but no exact number of holdings is available.

Before the threat of Trump’s ban emerged, ByteDance had discussions with Microsoft about establishing a similar relationship in which the Seattle tech giant would hold a hold. small stake in TikTok. However, when the threat emerged from President Trump, the discussions turned to Microsoft’s acquisition of TikTok’s US, Canada, Australia and New Zealand businesses – and eventually Oracle was the winner. .

But while Oracle’s stake makes TikTok more like a legally separate company, it’s more likely that the company will still depend on algorithms and applications developed and deployed in China.

In a recent interview with CNBC, TikTok also pledged to increase recruitment in the US. US Treasury Secretary Steve Mnuchin described the deal as part of an effort to establish TikTok as ” a company with headquarters in the United States .”

It is not yet clear how the new deal will make any changes to TikTok’s operations or whether it will actually address national security concerns – the key factor leading to the ban and trade. this case. Former Facebook security chief Alex Stamos said on Twitter: ” A deal with Oracle just storing data without having the source code and major changes in operations won’t solve any problems. Legal for TikTok . ”

Announced on Sunday, the deal with Oracle was a last-minute effort to save TikTok from a US ban. Currently, according to a report from the Financial Times, the US president has not officially approved the deal and important details are still being determined.

The deal’s national security limits are drawing criticism from Trump’s Republican congressman. In an open letter on Monday, Senator Josh Hawley warned Mnuchin to oppose the deal.

Refer to The Verge