The headlines in the summer of 2020 were dire and definitive: TikTok, the wildly popular short-form video app, was to be banned in the United States. President Donald Trump had issued executive orders, citing national security concerns over its Chinese ownership, and gave parent company ByteDance an ultimatum: sell your US assets or be shut down. The future of 100 million American users and a defining cultural platform hung in the balance.
Then, in a classic Trump-era twist, the story flipped entirely. By September, the President stood before the press and announced, “I have given the deal my blessing… It’ll be a new company, it’ll be totally secure.” The ban was lifted. A deal was done.
This article dissects the unprecedented and complex agreement that allowed TikTok to remain operational in the US. We’ll explore the key players—Oracle and Walmart—the intricate structure designed to appease security concerns, and the fascinating geopolitical and economic forces that ultimately led to a truce.
From Ban to Blessing: The Timeline of a High-Stakes Standoff
To understand the deal, one must first appreciate the rapid-fire sequence of events that brought the world's largest superpower and a tech giant to the negotiating table.
Early August 2020: President Trump signs two executive orders. The first prohibits any US transactions with ByteDance. The second gives the company 90 days to divest its US operations.
The Microsoft Bid: Tech giant Microsoft emerges as the leading suitor, publicly confirming it is pursuing a deal to acquire TikTok’s operations in the US, Canada, Australia, and New Zealand.
Mid-September: A dark horse appears. Enterprise software giant Oracle, a company with deep ties to the Trump administration, enters the fray not as a buyer, but as a “trusted technology partner.”
September 19, 2020: After reviewing proposals from both Microsoft and Oracle, President Trump announces he has approved a deal in concept involving Oracle and Walmart. He tells reporters, “I have given the deal my blessing.”
The sudden pivot from a forced sale to a partnership model stunned observers. The question on everyone’s mind was: what changed?
The Anatomy of the “Done Deal”: Oracle, Walmart, and “TikTok Global”
The deal was not a straightforward acquisition. Instead, it was a complex restructuring designed to create a new entity, unofficially dubbed “TikTok Global,” that would satisfy US national security demands while allowing ByteDance to retain majority ownership.
The key components were:
US User Data Migration: All US TikTok user data would be migrated to Oracle’s Generation 2 Cloud infrastructure.
Exclusive Cloud Home: Oracle would become TikTok’s exclusive cloud provider in the US, giving it complete control over the housing and management of American data.
Source Code Oversight: Oracle would be allowed to review TikTok’s full source code and algorithms to check for any potential backdoors or security threats that could be exploited by the Chinese government. This was framed as a “security audit” privilege.
Board Seat and Stake: Walmart, along with Oracle, would take a combined 20% stake in the new TikTok Global entity.
E-commerce Integration: Walmart would bring its expertise in logistics, payment processing, and online retail to help TikTok develop and scale its nascent e-commerce capabilities, a key future revenue stream.
Why the Sudden Pivot? Decoding Trump’s Blessing
President Trump’s reversal from a hardline ban to enthusiastic approval was driven by several factors:
The “US Cloud” Solution: Oracle’s proposal directly addressed the stated national security problem: the potential for American user data to end up in the hands of the Chinese Communist Party. By bringing the data under the control of a US company with extensive government contracts, the deal theoretically neutralized the primary threat.
Economic Benefits: The deal promised significant US investment. TikTok Global pledged to create 25,000 new American jobs over time. Furthermore, the company announced plans to establish a new $5 billion educational fund, a point Trump highlighted proudly.
A Political Win: With the election looming, the President could frame the outcome as a victory. He had taken on a Chinese company, forced it to bend to US demands, and secured jobs and investment for Americans—all without banning an app beloved by a key demographic of young voters.
Lobbying and Influence: ByteDance, Oracle, and Walmart engaged in intense lobbying efforts. Oracle’s co-founder, Larry Ellison, was a rare open supporter of Trump in Silicon Valley, which likely gave his company’s proposal a more favorable hearing.
The Sticking Points: What the Deal Did NOT Solve
While Trump declared the deal “done,” numerous complex details remained unresolved, and critics were quick to point out its ambiguities.
Who Controls the Algorithm? The algorithm is the secret sauce that makes TikTok’s “For You” page so addictive. The deal was murky on whether ByteDance would license it to TikTok Global or if Oracle would have any ownership stake in it. This was a major point of contention, as control of the algorithm is effectively control of the platform.
National Security Review: The deal still required formal approval by the Committee on Foreign Investment in the United States (CFIUS), a process that could take time and uncover new hurdles.
Ongoing Legal Challenges: ByteDance and TikTok users had filed lawsuits challenging the executive orders, creating legal uncertainty that extended beyond the political announcement.
Chinese Approval: Crucially, any deal involving the transfer of technology (like the algorithm) would also require export approval from the Chinese government, which had recently updated its laws to restrict the sale of AI technology. This added a layer of potential veto power from Beijing.
The Fallout and Legacy: A Precedent for the Tech Cold War
The TikTok-Oracle deal set a powerful precedent for how the US could manage the perceived threat of Chinese tech without resorting to outright decoupling.
The "Proxy Control" Model: It established a new model of “proxy control,” where data sovereignty and security oversight are granted to trusted US partners, even if ownership remains foreign. This model has since been considered for other Chinese apps.
Oracle’s Cloud Ascent: The deal was a monumental win for Oracle Cloud, instantly making it a major player by adding one of the world’s most data-intensive applications to its portfolio.
A Blueprint for Biden: While the Biden administration later dropped the Trump-era legal battle, it essentially maintained the core of this agreement, continuing to negotiate a national security solution centered on Oracle’s oversight of US data.
Conclusion: A Deal Reflecting a New Digital Reality
The Trump-TikTok deal was more than a corporate transaction; it was a microcosm of the new digital world order. It demonstrated that in the evolving tech cold war between the US and China, complete separation is often impractical. Instead, complex, messy, and innovative compromises are emerging.
The agreement acknowledged the global nature of technology while attempting to assert national control over the most sensitive asset: data. It proved that economic interdependence and national security are not always mutually exclusive, but require creative and rigorously enforced structures.
While the declaration that the “deal was done” was arguably premature, it set in motion a process that ultimately allowed TikTok to continue its reign in the US. The saga proved that in the 21st century, the most powerful negotiations are not just over trade tariffs or territory, but over algorithms, data flows, and the digital landscape of our daily lives.
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