Deal with Oracle and Walmart – Tiktok’s second chance

Deal with Oracle and Walmart – Tiktok's second chance

Oracle and Walmart are likely to run TikTok’s US operations. From the Chinese point of view, it is a compromise solution.

Now Trump doesn’t seem to be serious after all: In the dispute over the TikTok ban, the American president gave his “blessing” over the weekend for a solution in which the US companies Oracle and Walmart would manage the video platform business from China. A “new company” called “TikTok Global” should be created, Trump said.

The deal roughly outlined: In Texas, TikTok would now build a new headquarters, employ 25,000 people and store user data on separate cloud systems. The deal is not yet dry, but TikTok has already confirmed in a statement that Oracle and Walmart will receive 20 percent of the company’s shares. Washington also granted the app an extension of one week. Originally, TikTok should no longer have been available for download in the US on Sunday.

For months the US government has been accusing tech competition from the Far East of forwarding user data to China’s communist leadership. Washington has so far not provided any evidence, just as it has not, incidentally, in the case of Huawei – the network supplier is struggling with identical espionage allegations.

However, it can be proven that TikTok has repeatedly censored political content, for example in short videos about the situation of the Uighur minority in the western Chinese province of Xinjiang, who are systematically suppressed and interned by the central government.

Of course, Trump’s main concern is to put a stop to China’s first, unreservedly successful company worldwide. No app currently has as many downloads as TikTok, and over 100 million people use the video platform in the United States alone.

Nevertheless, Beijing cannot credibly portray itself as a victim, after all it has blocked almost all relevant apps from Silicon Valley for its own market: Instagram, Twitter, YouTube and Facebook can only be used with – de facto illegal – VPN software. China’s leadership censors its internet and does not tolerate networking of activists under any circumstances.

What makes TikTok so special is its artificial intelligence-based algorithm, which not only ensures a record-breaking length of stay for its users, but is also technically superior to that of its US competitors such as Instagram and Facebook.

With TikTok, it basically hits a western-style company: In contrast to most company boards in China, founder Zhang Yiming is not a communist party member, not even a staunch patriot. The 37-year-old computer scientist breathes “Silicon Valley” more than any other major startup founder in China.

His idols, he writes quite openly, are based in California – for the nationalist Internet mob in China, Zhang tended to be a traitor. The fact that the startup visionary, who was born in Fujian, is now caught between the fronts of a new Cold War, is hardly surprising to anyone as much as he is.

The TikTok deal is viewed with mixed feelings by the Chinese propaganda media. Hu Xijin, editor-in-chief of the Global Times, describes him as “still unfair”, but “relatively sensible” for the parent company Bytedance. “The recent decision by the Chinese government to restrict technological exports has also influenced the course of events,” writes Hu, who is mostly regarded as the journalistic seismograph of the public party line.

Another Chinese app has to say goodbye to the US market: WeChat is a digital hybrid that has long been indispensable in everyday life for the Chinese – from messenger services to food orders to mobile payments.

The fact that residents of the United States will no longer be allowed to download WeChat in future affects the Chinese diaspora, whose communication with friends and relatives in the People’s Republic is being made more difficult. In addition, the ban could also affect US companies in China, which would suffer significant competitive disadvantages without WeChat.

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