Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ TikTok will be a separate company partly owned by Oracle

TikTok will be a separate company partly owned by Oracle

Oracle plans to take a stake in a newly formed TikTok company as part of the recently announced deal, The Financial Times reports. The new arrangement does not split TikTok regionally, but it does create a separate business unit for the app, where Oracle will take a minority stake. Oracle will also ensure that data from US users is stored and processed in the US in accordance with the recommendations of the US Committee on Foreign Investment (CFIUS).

TikTok was already headquartered in California with nominal independence from ByteDance’s China operation. The most significant change made to the agreement is Oracle̵

7;s minority stake in the company, the size of which is still unclear. But while Oracle’s stake makes TikTok a more legally separate company, it is still likely that the resulting company will rely on algorithms and applications developed and implemented from China.

TikTok is committed to increasing employment in the United States, and in an interview with CNBC, Treasury Secretary Steve Mnuchin described the deal as part of a broader effort to establish TikTok as a “US headquarters company.”

It is also unclear whether the new agreement will result in changes in how TikTok works, or whether it will meaningfully tackle the security issues that first motivated the proposed ban. As former Facebook security chief Alex Stamos put it on Twitter: “An agreement in which Oracle takes over hosting without source code and significant operational changes will not address any of the legitimate concerns regarding TikTok.”

Announced Sunday, the Oracle agreement is part of a last-minute attempt to prevent the app from being banned in the United States, as threatened by President Trump. The President has not yet formally approved the agreement, and according to Financial Times, crucial details are still being determined.

The event’s national security restrictions have also drawn criticism from Trump’s Republicans. In an open letter Monday, Senator Josh Hawley (R-MO) called on Mnuchin to oppose the deal.

“An ongoing ‘partnership’ that allows for anything but full release of the TikTok software from the control of a potential Chinese Communist Party is completely unacceptable,” Hawley wrote, “and completely inconsistent with the President’s Declaration of 6 August.”

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