Oracle Reportedly Outbids Microsoft for TikTok’s U.S. Operations, To be Its ‘Trusted Tech Partner’

TikTok has become a casualty in the ongoing war between the United States and China. President Trump signed an executive order last month that effectively game ByteDance, TikTok’s parent company, 45 days to sell its business in the U.S. to an American company. Microsoft emerged as one of the leading companies interested in acquiring TikTok’s international business in select markets. However, the company has announced that it was informed by ByteDance that it would not be selling TikTok’s U.S. business to them.

A Wall Street Journal report states that it is Oracle that has managed to beat Microsoft in the bid for TikTok’s U.S. operation. The report states that TikTok will be announcing Oracle as a “trusted tech partner.” Oracle will be partnering with ByteDance to run TikTok’s U.S. operations instead of acquiring its business outright. As a tech partner, Oracle will be hosting TikTok’s video data on its servers in the U.S. ByteDance has also reportedly made it clear to U.S. government officials that it won’t be selling its source code to any U.S. buyer, with the tech team in the U.S. free to build an algorithm of their own.

With this move, ByteDance is hoping to please the U.S. government as well as the Chinese government. The latter is not in favor of ByteDance selling its U.S. operations to an American company and even passed rules that limit the export of key technology from Chinese companies.

However, the deal between Oracle and ByteDance will still need approval from the CFIUS (Committee on Foreign Investment in the United States). If President Trump does not approve the terms of the deal, it could see TikTok being banned in the United States on or after September 29.

Our Take

ByteDance is doing its best to please the Chinese as well as the U.S. government by planning to announce Oracle as its “trusted tech partner” in the U.S. TikTok is already banned in India due to security concerns and if Trump does not approve the deal, it could lead to the app getting banned in another major market as well. Trump has also cited national security as the reason behind the potential TikTok ban.

[Via WSJ]