‘There’s No There There’: What the TikTok Deal Achieved (original) (raw)
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The agreement for the social media app falls short of President Trump’s promises.
The U.S. headquarters of TikTok in Culver City, Calif. A deal to acquire the company was announced on Saturday, but the details have come under scrutiny.Credit...Mike Blake/Reuters
Sept. 20, 2020
SAN FRANCISCO — The saga of TikTok had everything: Ominous threats of surveillance. A forced fire sale. Threats of retaliation. Head-spinning deal terms that morphed by the hour. Dark horse bidders and a looming deadline.
Now, as the dust settles on the weeks of drama over the social media app, investors and others are asking what it was all for.
The answer? A cloud computing contract for the Silicon Valley business software company Oracle, a merchandising deal for Walmart and a claim of victory for President Trump.
In the deal announced on Saturday, which was spurred by Mr. Trump’s national security concerns over TikTok, the social media app said it would separate itself from its Chinese parent company, ByteDance, and become an independent entity called TikTok Global. Oracle would become TikTok’s new cloud provider, while Walmart would offer its “omni-channel retail capabilities,” the companies said.
Oracle and Walmart would own a cumulative 20 percent stake in TikTok Global, which said it planned to hire 25,000 people in the United States over an undisclosed period and go public sometime in the next year. TikTok also promised to pay $5 billion in “new tax dollars to the U.S. Treasury” and create “an educational initiative to develop and deliver an A.I.-driven online video curriculum,” according to a joint announcement from Oracle and Walmart.
President Trump pronounced the agreement a success and blessed it, saying on Saturday that TikTok would “have nothing to do with China, it’ll be totally secure, that’s part of the deal.” And he was partly right: The deal puts more control of TikTok into the hands of Americans, with four of the five members of the new entity’s board being American. Oracle would also oversee the app and could verify the security of TikTok’s code and any updates.
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