Big questions remain even after Walmart and Oracle’s deal for TikTok received approval from the White House.
Over the weekend, President Donald Trump green-lighted an agreement that would allow Walmart and Oracle to take a minority stake in a new U.S.-headquartered company called TikTok Global. “It will have nothing to do with China,” he said. The Department of Commerce also delayed the threatened ban on U.S. downloads of the app by a week, to Sept. 27.
However, a statement today from the app’s Beijing-based parent, ByteDance, suggested that it would carry out a round of pre-initial public offering financing that would give it an 80% stake in TikTok Global. Walmart and Oracle, on the other hand, will jointly command 20% as part of the ownership structure.
According to a Monday release from Oracle and Walmart, the multinational computer technology corporation would become the secure cloud provider for the app and host the data of American users in the country. It would own 12.5% of TikTok Global.
On the other hand, Walmart will “bring its omnichannel retail capabilities” — including its e-commerce platform, order processing and advertising services — to the newly formed company. On Saturday, the big-box chain announced that it had tentatively agreed to purchase 7.5% of TikTok Global, while CEO Doug McMillon would serve as one of its five board members.
“TikTok has delighted hundreds of millions of users and creators around the world, and we are looking forward to creating an even more exciting experience for that community,” the retailer said. “This partnership will provide Walmart with an important way for us to expand our reach and serve omnichannel customers, as well as grow our third-party marketplace, fulfillment and advertising businesses.”
What’s more, the release suggested that TikTok Global would create more than 25,000 new jobs in the U.S. and pay upwards of $5 billion in new taxes to the Department of the Treasury. Within a year, the company aims to conduct its first public offering with a listing on one of the major U.S. stock exchanges.
ByteDance has been in talks to divest TikTok’s U.S. operations after Trump made claims that its Chinese ownership made it a security risk. A few weeks ago, Walmart had partnered with Microsoft, which at the time was the frontrunner to snap up the app. (According to multiple reports, an acquisition of TikTok’s operations in the U.S., Canada, Australia and New Zealand could be worth up to $50 billion.) Microsoft, however, announced last weekend that it was informed by ByteDance that it would not become the owner of TikTok’s U.S. business.