Walmart 'tentatively agrees' to purchase stake in TikTok Global

US grocer Walmart said on Saturday (19 September) that it was “excited about our potential investment in and commercial agreements with TikTok Global”, as it moved closer to a unique deal to take a stake in the social media platform in the US.

“While there is still work to do on final agreements, we have tentatively agreed to purchase 7.5% of TikTok Global as well as enter into commercial agreements to provide our eCommerce, fulfilment, payments and other omnichannel services to TikTok Global,” it said in a statement.

The comment accompanied a joint announcement from global technology business Oracle and Walmart, which said that the two organisations together look set to acquire 20% of the TikTok Global business as part of a pre-IPO deal.

This is no ordinary arrangement, though – it is wrapped up in politics. Saturday’s statement of intent from Oracle and Walmart only came after US president, Donald Trump, appeared to give the deal the green light.

The White House previously targeted China-based TikTok, which is owned by ByteDance, over concerns the Chinese government could force it to hand over data on Americans using the platform. TikTok said it would not comply with such a request if it was made, but that did not stop government involvement in the deal.

With Oracle and Walmart’s mooted investment and the creation of a specific TikTok Global business, the responsibility for running the social media platform sits in US. Evidently, the White House supports this structure.

A landmark deal has conditionally been approved whereby Oracle becomes TikTok's secure cloud provider, while TikTok Global will be majority owned by American investors, including Oracle and Walmart.

The deal could yet break down, but if not TikTok Global would be an independent American company, headquartered in the US, with four Americans on a board of five directors. One of those directors would be Walmart CEO, Doug McMillon.

Importantly, considering the security issues raised by the White House, all the TikTok technology would be in possession of TikTok Global, and would need to comply with US laws and privacy regulations. All American data would be moved to Oracle's Generation 2 Cloud data centres.

ByteDance said TikTok Global would create more than 25,000 new jobs in the US and pay more than $5 billion in new tax dollars to the US Treasury.

Additionally, TikTok Global and its investors would create an educational initiative to develop and deliver an artificial intelligence-driven online video curriculum to teach children a variety of courses from basic reading and maths, to science, history and computer engineering.

Fundamentally, this structure would allow TikTok to continue operating in the US, where it already has 100 million users.

Over the weekend, Trump’s plan to ban another Chinese technology platform in the US, WeChat, was blocked by a federal judge.