Oracle Corp. (ORCL) - Get Report said Saturday it had reached a deal with China's ByteDance to become the secure cloud technology provider for its video sharing app, TikTok, and take a minority stake in the company along with Walmart (WMT) - Get Report.
In a deal that also received the "blessing" of President Donald Trump, Oracle and Walmart would combine to own around 20% of TikTok's global business, which includes its U.S. operations. TikTok Global, ByteDance said, will ultimately be taken public through a listing that could value the business at around $60 billion, according to Bloomberg.
ByteDance said the new company would be located in the United States, with President Trump adding that 25,000 new jobs will be created along with a $5 billion investment in 'education fund'.
"As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global," said CEO Safra Catz. "Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud."
"We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users, and users throughout the world," he added. "This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders."
Walmart's contribution to the deal was described as a "commercial partnership" with TikTok that would give the world's largest retailer a 7.5% stake in the tech group's global operations.
“We are pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.,” the company said in a statement.
The deal comes less than 24 hours after the Commerce Department said it would block any new downloads of the app, as well as the China-based messaging system WeChat, in order to combat what it call the "malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations.”
Earlier Saturday, the Commerce Department extended the deadline for a ban on new TikTok downloads until September 27. The fullest ban for TikTok, however, was pegged for November 12, "for the national security concerns posed by TikTok to be resolved", providing a longer window for Oracle and its consortium to get Presidential approval.
"I have given the deal my blessing," Trump said Saturday. "I approved the deal in concept. If they get it done, that's great. If they don't, that's OK too."