LULU GARCIA-NAVARRO, HOST:
A tentative deal has been reached over the popular app TikTok. Oracle, whose head, Larry Ellison, is close to President Trump, and Walmart will take over U.S. operations. TikTok downloads were set to be banned in the U.S. starting midnight tonight but no longer. NPR's tech reporter Bobby Allyn has more.
BOBBY ALLYN, BYLINE: This is how some of the hundred million Americans who use TikTok learned about the app being rescued - from a TikTok made by 17-year-old Bonnie Gumball in East Texas.
(SOUNDBITE OF TIKTOK)
BONNIE GUMBALL: Guys, you will not believe this. TikTok is saved because Trump just accepted the Oracle deal. You can read it all over the news right now.
ALLYN: Indeed, Trump says he's supporting a deal in which software company Oracle will team up with Walmart to form a new company, TikTok Global. Here's President Trump.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: It will have nothing to do with China. It'll be totally secure. That'll be part of the deal, and it will be both Oracle, as you know, and Walmart.
ALLYN: Oracle will house TikTok's data on Americans. Walmart is a major investor and will let people shop for products through TikTok. The China part, though, Trump didn't get exactly right. Oracle and Walmart will own a combined 20% of the new company. TikTok's parent company in Beijing, ByteDance - they're keeping 80% of the company, all of which is to say months of executive orders, lawsuits and confusing mixed messages about the future of TikTok, and we're left with a new company that is mostly Chinese-owned?
CHRIS KELLY: The interactions with the Chinese government and the ability of the Chinese government to put pressure on the ByteDance company is still substantial.
ALLYN: Chris Kelly is the former chief privacy officer at Facebook. He says Oracle babysitting TikTok user data will provide a buffer against a possible intrusion from Chinese authorities, which has been what the White House's fear has been all along. But Kelly says having most of the app's ownership in Beijing could still be a vulnerability for the data of Americans.
KELLY: Will there be enough safeguards built in when there have been issues of foreign governments trying to infiltrate American companies? And so when you have that close tie that's remaining, will there be a complete ability to avoid that?
ALLYN: Trump signed an order last month saying ByteDance was supposed to completely divest from TikTok in the U.S., and that did not happen. But what's important is who the decision-makers are. TikTok says 4 out of the 5 new board members will be Americans. Weifeng Zhong researches U.S.-China economic relations at George Mason University.
WEIFENG ZHONG: If Oracle doesn't have the final say, I would be very skeptical about this deal.
ALLYN: However much power over TikTok Oracle has, it did emerge from all of this a big winner. Oracle is a software company that runs a cloud computing business that has been lagging behind Amazon, Microsoft and Google. Hosting millions and millions of users' data will be a big moneymaker for them. Trump and Oracle chief executive Larry Ellison have a history. Trump called him, quote, "a tremendous guy." Ellison is one of the few tech leaders who supports Trump. Earlier this year, he held a fundraiser for the president at his estate outside of Palm Springs, Calif. Bobby Allyn, NPR News, San Francisco.
(SOUNDBITE OF TEEN DAZE'S "NEW DESTINATION")
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.