Part of Oracle TikTok Deal Includes Moving Headquarters to US

We’re learning more details about the TikTok Oracle deal. It seems that TikTok’s headquarters will be moving to the US as part of the deal.

Details about the Oracle TikTok deal is continuing to roll in. Earlier, we showed reports that said that Oracle has won the race to buy TikTok. The deal was made under the immense pressure of impeached president Donald Trump. Trump signed an executive order banning the social media site from the US unless it found American owners. The executive order sparked lawsuits from both TikTok and its employees.

Since the deal became publicly known, details began emerging about both what the executive order actually meant and what the deal looks like. Yesterday, we learned that the Trump administration isn’t going to stop employees from working with the company. This is the result of a court filing urging a judge to dismiss the lawsuit brought by TikTok’s employees.

Today, we are learning some of the details about the Oracle TikTok deal itself. As we found out about the deal being struck, some speculated that the deal only revolved around hosting. The gist of it is that all the deal is about is a couple of servers located in the US and that Oracle is merely going to host some infrastructure on their servers. We are learning that the deal is about more than just a server farm situated in the US. It turns out, the deal also involves moving TikTok’s headquarters to the US. From Deadline:

Mnuchin said the Oracle pact includes a new U.S. headquarters for TikTok and thousands of jobs.

“We did get a proposal over the weekend that includes Oracle as the trusted technology partner with Oracle making many representations for national security issues. There is also a commitment to create TikTok global as a U.S.-headquartered company with 20,000 new jobs,” Mnuchin said. He CFIUS, the Committee on Foreign Investment in the United States, will be reviewing the offer this week “and then we will be making a recommendation to the President and review it with him.

He declined to reveal other details but he and Oracle clearly defined it as a technology partnership not an outright acquisition of TikTok’s U.S. operations, which rejected suitor Microsoft had been pursuing.

Oracle confirmed Secretary Mnuchin’s statement “that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider. Oracle has a 40-year track record providing secure, highly performant technology solutions.”

So, it’s not an outright acquisition as demanded by the Trump executive order, nor is it just involving a couple of servers. This, naturally, leaves a lot of questions like whether China would approve of this. Moreover, will Trump approve of this as well because it isn’t actually the acquisition he was gunning for in the first place. Apparently, for the latter, that aspect is partly under review. From Yahoo! News:

President Donald Trump is preparing to decide whether to approve Oracle Corp.’s alliance with the Chinese-owned video app TikTok after security experts examined the companies’ proposal.

A U.S. national security panel reviewed the bid Tuesday afternoon, but didn’t make a recommendation that the president approve or reject the deal, according to a person familiar with the matter. Speaking to reporters on the South Lawn of the White House, Trump said his staff are “very close to a deal” and signaled what could be telling support for Larry Ellison, Oracle’s chairman.

“I have a high respect for Larry Ellison,” he said. “He’s somebody I know, he’s been really a terrific guy for a long time.”

The proposal, unveiled in part, doesn’t call for Oracle to buy the business outright. Instead, the company would invest in a newly restructured global TikTok, with operations based in the U.S., according to people familiar with the proposal. Bytedance would maintain majority ownership and at least three shareholders in TikTok’s Chinese parent company — General Atlantic, Sequoia Capital and Coatue Management — would take stakes in the new business, said the people, all of whom asked not to be identified because the terms aren’t finalized.

Oracle’s proposal lacks the payment to the U.S. government that the president has insisted be the condition of any deal, according to two people familiar with the plan. Yet the company will try to use the promise of creating 20,000 new jobs through the popular video app as a way to win his approval, they said.

Probably the most frustrating part about this story is that every time we get some long-awaited answers, more questions keep popping up. Oracle won’t really “own” the company as Trump wanted. Oracle won’t be getting the payments funneled to the US like Trump wanted. At the same time, there is a very real possibility that Trump will approve of this whole charade anyway. It’s probably why people are already concluding that everything about this is pure grift – a hallmark of the Trump’s presidency in the first place. While a deal may be all but secured at this point, this story is still far from over.

Drew Wilson on Twitter: @icecube85 and Facebook.

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