The ban on video-sharing app TikTok that was to take effect midnight Sunday looks like it will now not happen, as President Trump says he has given his "blessing" to a deal that sees China's ByteDance sell a stake of the business to Oracle (NYSE:ORCL) and Walmart (NYSE:WMT).
According to TikTok, it will maintain and expand a U.S. headquarters that will bring 25,000 jobs with it. Both Oracle and Walmart will take part in a round of financing in a pre-IPO company that allows them to acquire a cumulative 20% interest in TikTok Global, with Oracle becoming the app's "trusted cloud and technology provider responsible for fully securing our users' data."
User data security was the reason the ban was contemplated in the first place. ByteDance was accused of surreptitiously collecting massive amounts of personal data on users, which administration officials feared could be used for blackmail, corporate espionage, or tracking U.S. government workers who had downloaded the app to their smartphones.
TikTok's interim head, Vanessa Pappas, said in a statement that although "we strongly disagree with the implications of TikTok as a national security threat, we nonetheless understand the concerns."
Oracle CEO Safra Catz said, "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."
The deal gives a leg up to the tech giant's cloud computing business that has lagged behind its rivals, while letting Walmart find an avenue to youthful consumers by bringing its e-commerce "retail capabilities" to the platform, perhaps through shopping on Walmart.com through the app.
Trump says he has agreed "in concept" to the deal that TikTok maintains will "ensure U.S. national security requirements are fully satisfied."