TikTok-Oracle deal to result in separate US firm, suggest reportstext_fields
San Francisco: A new Financial Times report suggests that the Tik-Tok-the short video-sharing platform- is likely to spin off into a separate US-headquartered company as per the arrangements.
In this new corporate entity, Oracle will be a minority shareholder, said the report on Tuesday citing people familiar with the matter.
However, what will be the size of Oracle's ownership is still not clear. But an important role the Cloud major will play is in ensuring that data of TikTok's users in the US are stored and processed within the boundaries of the country.
Initially Microsoft was involved in the talks, now both Walmart and Oracle are in negotiations with Beijing-based ByteDance,the parent company of Tik-Tok.
On Monday, the confirmation by Oracle to become a trusted tech partner of ByteDance announced, a day after Microsoft, which was among the frontrunners to seal a deal for TikTok's US operations, revealed that its bid was rejected by ByteDance.
The Trump administration last month issued an executive order barring anyone from doing transactions with TikTok's Chinese parent ByteDance 45 days after the order was released.
The executive order was issued apparently to protect "national security" as the Trump administration earlier raised concerns that the Chinese government could have access to data of American users of TikTok, an allegation that both China and TikTok denied.
A subsequent order required the short video sharing platform to divest its operations in the US by September 20 or face a ban.
TikTok also said that it had submitted a proposal to the US administration to resolve its "security concerns."
Despite the new arrangements with Oracle, TikTok's dependence on algorithms deployed from China may not end, according to the Financial Times report.
Meanwhile US President Donald Trump said he has spoken with the leadership team of Walmart and Oracle as part of his decision-making process on TikTok.
In a letter to Treasury Secretary Steven Mnuchin, Senator Ted Cruz, a member of the Senate Foreign Relations and Judiciary Committees expressed concerns that the Oracle-TikTok deal could leave the American people exposed to undue influence by the Chinese Communist Party and undermine US national security interests
According to Cruz,the other companies who are interested in purchasing ByteDance, feels that they are unable to address national security concerns under the conditions imposed by the Chinese government.
"It is hard to see how such a proposal can satisfy the spirit of the executive orders, and harder still to see how such an arrangement serves American interests," Cruz added
(With inputs from PTI and IANS)