TikTok might move its global headquarters to the US in order to avoid any troubles in the future. According to a recent report by the Financial Times, ByteDance is preparing to make TikTok a new "US-headquartered company with Oracle investing as a minority shareholder."
After a months-long drama, ByteDance selected Oracle as its "trusted tech partner" in the US earlier this week. The partnership is yet to be announced officially but the details of the deal are now starting to emerge. Oracle will reportedly have a stake in TikTok's global business and not just the US operations. ByteDance, meanwhile, will be the majority shareholder of the entity.
American TikTok users' data will stay within the country, sources told the FT. Oracle will "independently process" TikTok's data, at least that of the American users. It's unclear if the company will have access to TikTok data from across the globe as well.
ByteDance, on the other hand, will manage TikTok at "arms-length". This will allow the company to keep hold of the app's all-important recommendation algorithm. The Chinese government has blocked the sale of the algorithms to a non-Chinese company.
These arrangements also allow ByteDance to avoid the full sale of TikTok that the US government had desired, while addressing President Trump's security concerns. The Beijing counterparts have also reportedly shown support for the plan.
However, the deal still needs the approval of the Trump administration. So there's still some material left in this drama. President Trump has been vocal about his fondness for Oracle Chairman Larry Ellison. Both Ellison and CEO Safra Catz also openly support the Trump administration. These personal relations are likely to boost the chances of Trump accepting TikTok's roposal.
TikTok also promises to create 20,000 jobs
In addition to setting up its global headquarters in the US, TikTok is also promising to create 20,000 new jobs in the country. This offer is likely to win Trump's confidence "in an election year". Many Americans have lost their jobs because of the economic recession caused by the COVID-19 pandemic. Anyone would welcome new job opportunities during this unprecedented time.
Walmart, which was interested in acquiring TikTok's US operations jointly with Microsoft, might also own a minority stake in the new, US-based TikTok, the report adds. The duo also wanted to takeover TikTok's operations in Australia, Canada, and New Zealand.
However, ByteDance was never willing to sell TikTok's entire business. The company rejected the Microsoft-Walmart proposal and picked Oracle as its "trusted tech partner" in the US. Several other US investors may also own a minority stake in TikTok.