ByteDance Will Not Transfer TikTok’s Algorithims And Technology To Oracle
Over a few last months, the TikTok deal has been one of the top headlines in the technology arena. From President’s Trump warning to ban the app if they not dissect their assets to finally Oracle becoming the trusted technology partner. On Monday morning, ByteDance, the parent company of TikTok, brought some clarity to its latest deal.
Chinese technology enterprise ByteDance recently issued a statement that said it will retain 80% of its own after selling 12.5% to Oracle and 7.5% to Walmart. It also added that it will not share its algorithm and technology to the U.S. firm. However, Oracle can still check on the source code of the video-sharing app. “The current plan does not involve the transfer of any algorithms and technologies. Oracle has the authority to check the source code of TikTok USA,” ByteDance said in a statement, according to a CBNC translation.
ByteDance entailment to not transfer their algorithms comes after Chinese updated its rules to restrict the export of recommendation algorithms to foreign countries. In a statement, ByteDance said that it will comply with the rules. Meanwhile, in the U.S., President Trump approved the deal and told Bloomberg reporters that the TikTok-Oracle deal has my “blessing.” Earlier, Trump had alleged TikTok to be a national security threat to the U.S.
Currently, all the board members on the ByteDance are Americans except the founder Zhang Yiming. In addition to this, Walmart who acquired a minor stake in the company, has its CEO, Doug McMillon, on the board seat. After its deal with Oracle and Walmart, ByteDance also confirmed that they will be working towards the initial public offering in the U.S. This will adhere to the company to confer more transparency in the country. “Both companies will take part in a TikTok Global pre-IPO financing round in which they can take up to a 20% cumulative stake in the company,” TikTok said in a statement.
Additionally, ByteDance presumed that it will pay around USD 5 Billion in income tax to the U.S. Treasury in the coming years. The company added that the income tax has “nothing to do with the ongoing deal.” Besides this, President Trump said that it wants the companies to commit USD 5 Billion for education. However, ByteDance was not aware of the commitment while it added that its “partners and shareholders” are devoted to developing online classes powered by artificial intelligence.
ByteDance has agreed to create over 25,000 new jobs in the U.S. which will fulfill Trump’s ‘America First’ policy agenda. Before the deal came into action, Microsoft was the frontrunner in the race to acquire TikTok’s U.S. business; however, Oracle outbid them and became the cloud services provider to TikTok. Last month, TikTok CEO Kevin Mayer relinquished from its title just three months after joining the company. The reason behind its exit is said to be the increasing political tensions between the U.S. and China. Before joining TikTok, he was the chairman of the Direct-to-Consumer and International Division at Disney.
As of now, TikTok has over 700 Million monthly users while 100 Million users are from the United States. On the global level, the app has been banned in India over national security concerns. Meanwhile, the latest reports which conveys that the Indian government is willing to re-engage in talks with TikTok over the ban in the country.