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ByteDance Chooses Oracle as TikTok Tech Partner

Microsoft's offer to buy TikTok's US operations has been rejected but Oracle has confirmed it is part of TikTok's proposal to the US.

As reported by the Wall Street Journal, Oracle Corporation reportedly won the bid for video-sharing app TikTok’s US operations, citing anonymous sources. The news came after ByteDance announced it will not sell its TikTok US operations to rival bidder Microsoft and instead chose Oracle as a “technology partner.” The exact agreement between TikTok and Oracle remains unclear but it was not described as an outright sale. Last month Trump said Oracle would be “a great company” to take over TikTok’s US operations.

Microsoft said in a blog post on Sunday that: “We are confident our proposal would have been good for TikTok’s users while protecting national security interests. To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement.”

However, China’s state-run English TV channel CGTN later learned from sources that ByteDance will not sell TikTok’s US Operations to Oracle Corp or Microsoft Corp and ByteDance won’t give its source code behind the TikTok app to any US buyers. Chinese officials have apparently said the sale of TikTok to the US would make China look weak and they would rather see it shut down in the US than be sold to an American company. Tensions are already high between the two countries. Trump has said Chinese-owned TikTok, WeChat and Huawei pose a national security threat because the data collected could be shared with the US government.

US President Donald Trump gave an executive order for TikTok to sell its US operations to a US company by September 20 or face being banned after the US government said the app poses a threat to national security. There have also been concerns over the app collecting data from US citizens to give to the Chinese government. TikTok strongly denied the allegations and said its data centres are located outside of China.

It isn’t clear how much say Beijing will have in the agreement. Last month China revised the rules that govern the sale of certain kinds of technology to foreign buyers. The updated list includes data processing, speech and text recognition, which is the sort of technology that experts say is utilised by TikTok. Experts have pointed out that the rule change would likely require ByteDance to obtain government permission before it could sell to a foreign company.

Walmart had also been in discussions with Microsoft over a potential deal and shown interest in acquiring the US operations. Walmart said in a statement that “We know that any approved deal must satisfy all regulatory and national security concerns.” 

TikTok’s future is uncertain. Even if it is sold, it is unclear how exactly it will change. Any deal must be approved by the likes of the White House, the Chinese governments and ByteDance. Analysts predict the deadline will be extended.

According to reports, the acquisition of TikTok’s US operation could be worth a much as $50 million.

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