Trump gives his 'blessing' to TikTok deal with Oracle and Walmart

US President Donald Trump has given his ‘blessing’ to a deal between TikTok, Oracle Corp (All Sessions) and Walmart (All Sessions) that will allow the video sharing app, which is owned by Bytedance in China, to continue operating in the United States. The partnership still needs approval from the Committee on Foreign Investment in the United States, however it looks as though this aspect of the tech war between Beijing and Washington is coming to a close.

The deal will create a new company, dubbed TikTok Global, which will have its headquarters in the United States. According to media reports, US shareholders including Walmart will now control 53% of TikTok Global, Oracle will take a 12.5% stake and ByteDance will still own a minority stake as well.

However ByteDance has contradicted Washington, claiming that the Chinese firm will in fact have a majority 80% stake in the new US-based TikTok. This is at odds with comments from US President Trump, who said the deal 'will have nothing to do with China'.

As part of the deal, ByteDance will not be sharing TikTok’s algorithm or technologies with Oracle. Meanwhile ByteDance is planning an initial public offering of TikTok Global in the US to 'further enhance corporate governance and transparency.'

Oracle said there will be 'unprecedented assurance that US TikTok user data is private and secure.' In a statement Walmart and Oracle said TikTok Global would create over 25 thousand new jobs and pay over $5bn in US taxes. Vanessa Pappas, TikTok interim chief executive, said over the weekend in a video that the app in the US was 'here to stay'.

Dan Ives, head of tech research at Wedbush wrote in his latest analyst note, 'For TikTok, this is a huge strategic win as the company was facing the prospects of a forced sale or shutdown and now instead gets Oracle as a technology and strategic partner. While the US/China tensions continue across all aspects of the technology food chain, resolving this TikTok and ByteDance standoff and complex Rubik's Cube political backdrop is a relief for tech investors with Oracle in the winner’s circle.'

Shares in Oracle Corp (All Sessions) are trading higher by around 6% on the IG platform ahead of the US market open and Walmart is also in the green. Both companies are all-sessions stocks with IG, meaning you can trade them outside of normal US market trading hours.