Oracle has announced that the new TikTok venture, TikTok Global, will be entirely divested from ByteDance. This is contrary to earlier reports that ByteDance will own a majority stake in the business.

“Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global,” Oracle said in a statement.

Earlier reports had claimed that Oracle and Walmart would only have a 20 per cent stake in the new venture. Meanwhile, ByteDance was to maintain control of the other 80 percent. The confusing situation has not been publicly clarified by ByteDance while Oracle is now keeping mum. President Trump had told reporters after a deal was announced that China would have to relinquish control of the app for the deal to go through.

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China had instituted new export controls on algorithms capable of destroying a chance of a deal going through. This would have left ByteDance unable to share the algorithm that powers the TikTok page. The current proposal will see Oracle and Walmart take a minority stake in a new US-based TikTok corporation while avoiding those export controls.

Many observers are skeptical of whether the deal actually addresses national security concerns. It is also unclear if  China will approve of the proposal or if it will create another stumbling block.

The US Commerce Department issued an order blocking new downloads of the TikTok app from 20th September 2020. But, ByteDance got a week’s extension after President Trump gave his blessing to a deal with Oracle, Walmart. The deal will create a new corporation, TikTok Global, headquartered in the US for its American operations.

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