The popular video-sharing app TikTok and messaging and payment app WeChat have been granted a reprieve from a ban in the United States that was set to take effect on Sunday (September 20). President Donald Trump approved the concept of a deal between TikTok's Chinese-based owner ByteDance and Oracle and Walmart. The deal will be reviewed by regulators before it becomes official.
"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. "We will also maintain and expand TikTok Global's headquarters in the U.S. while bringing 25,000 jobs across the country."
As part of the proposed deal, Oracle will get a 12.5% in TikTok's global business. To ease national security concerns, Oracle will support the app using cloud-based servers in the United States.
In addition to getting approval from U.S. regulators, the Chinese government must also sign off on the deal. If the agreement is not approved, TikTok will be banned in the U.S. on September 27 at 11:59 p.m.
WeChat's fate in the U.S. is now in the hands of the courts. U.S. Magistrate Judge Laurel Beeler in California blocked the Commerce Department from forcing Apple and Google to remove WeChat from their respective app stores.
WeChat "serves as a virtual public square for the Chinese-speaking and Chinese-American community in the United States and is (as a practical matter) their only means of communication," Beeler wrote in his ruling.
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