For a while, TikTok’s fate in the United States was in jeopardy due to security concerns. The United States government was worried about U.S. citizens’ data being passed to the Chinese government without authority, and thus the company was at risk for being banned altogether in the U.S. Seemingly at the last minute, it looks like the company has come up with a solution for the problem, allowing for it to stay in America.
Tech giant Oracle has taken an ownership stake in a now newly-formed TikTok corp, according to The Financial Times. This arrangement has TikTok becoming a separate entity in which Oracle will then have a minority stake. This will allow Oracle to ensure that any data from U.S. users will remain stored and processed only in the United States, as was recommended by CFIUS, the Committee on Foreign Investment in the United States.
TikTok’s headquarters was already located in California and said that it had nominal independence from its parent company, ByteDance, which operates in China. As of now, the only thing that changes is that Oracle’s stake will make TikTok a more legally distinct corporation. Despite this, it is believed that the company will still be using algorithms and other applications that are developed and deployed in China.
The company has made a commitment to increasing U.S. hires. Treasury Secretary Steve Mnuchin told CNBC that the deal came as a part of the plan to make TikTok a “US-headquartered company.”
What’s still not clear as to what if any changes will be made to TikTok’s operations or even if the company with actually meaningfully address the main concerns: security. Former Facebook security chief Alex Stamos tweeted: “A deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok.”
According to The Financial Times, the deal has still yet to approve the deal and some of the more crucial details still need to be ironed out. Senator Josh Hawley penned an open letter to Mnuchin in opposition of the deal.
Hawley wrote: “An ongoing ‘partnership’ that allows for anything other than the full emancipation of the TikTok software from potential Chinese Communist Party control is completely unacceptable and flatly inconsistent with the President’s Executive Order of August 6.”
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