Oracle said it will take a 12.5% stake in the new TikTok Global, a U.S.-based entity formed from the Trump administration’s demand that the popular video app’s Chinese parent company, ByteDance, divest its U.S. operations to American owners.

Oracle confirmed its plans to take the ownership stake in TikTok shortly after President Trump said Saturday that he approved the deal “in concept.” As a part of the agreement, TikTok will run its app business on the Oracle Cloud, according to Oracle CEO Safra Catz.

TikTok said in a statement Saturday that it also is working with Walmart on a “commercial partnership.” Oracle and Walmart will be take up to a 20% combined stake in a pre-IPO financing round for TikTok Global (meaning Walmart may take up to 7.5% of the new company).

“We are pleased that the proposal by TikTok, Oracle and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.,” the app company said.

Separately, TikTok evidently is still subject to the Trump administration’s order banning American businesses from working with TikTok as of Sunday at midnight — meaning app stores like the Apple App Store and Google Play will be prohibited from providing downloads of the TikTok app in the U.S. TikTok late Friday filed a lawsuit seeking a temporary order to block the ban.

Walmart, which had previously been allied with Microsoft (whose deal bid was rejected by ByteDance), had confirmed its interest in a TikTok partnership. If Walmart were to integrate e-commerce and advertising into TikTok, that would “provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” Walmart said last month.

Other financial terms of the three-way pact were not disclosed.

TikTok said it will “maintain and expand” its U.S. headquarters, with plans to “bring 25,000 jobs across the country.” According to TikTok, it currently employs about 1,500 U.S. workers. Trump had told reporters earlier Saturday that TikTok Global would like have its new HQ in Texas.

The TikTok-Oracle-Walmart deal still needs approval by the Chinese government. ByteDance will continue to maintain control over the AI algorithms that power the TikTok app’s video recommendations.

“Oracle will quickly deploy, rapidly scale, and operate TikTok systems in the Oracle Cloud. We are 100% 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,” Catz said in a statement. “This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”

According to Oracle, TikTok decision to partner with the software and cloud provider “was heavily influenced by Zoom’s recent success in moving a large portion of its video conferencing capacity to the Oracle Public Cloud.”

In a statement, Oracle chairman and CTO Larry Ellison — who is a public supporter of Trump and held a fundraiser for the president earlier this year — said, “TikTok picked Oracle’s new Generation 2 Cloud infrastructure because it’s much faster, more reliable, and more secure than the first generation technology currently offered by all the other major cloud providers.”

TikTok claims it has 100 million users in the U.S. “We’re delighted that the individuals who’ve turned their creativity on TikTok into thriving careers, the small businesses using TikTok to reach customers during the pandemic, and the families who’ve found joy and connection through our platform will be able to use TikTok for many years to come,” the company said.

https://variety.com/2020/digital/news/oracle-tiktok-equity-stake-walmart-trump-1234776014/