TikTok settles for Oracle as partner for the US market – Mark Serrels

ByteDance has chosen Oracle as its US partner for its popular TikTok video service, a decision that comes as a deadline for a ban in the US of the popular app draws near.

The proposed deal is expected to meet the needs of the app users, as well as satisfy American national security concerns, a person familiar with the situation said. The California-based cloud computing giant will be ByteDance’s US “technology partner,” the person said. The deal likely won’t be structured as a sale, The Wall Street Journal reported, and still needs US government approval.

Tiktok short video service app

It may also not yet have been cleared by Beijing. “CGTN has learned from sources that ByteDance will also not sell TikTok’s U.S. operations to Oracle,” reported party-controlled TV station CGTN on Sunday. It’s unclear if this is a denial that a deal has been struck, or simply underlines that the reported “partnership” is not a sale to Oracle.

Chinese tech company ByteDance owns short-form video app.

Microsoft, which was pursuing a deal along with partner Walmart, said in a statement that its bid was rejected by Beijing-based ByteDance. The software giant had been seen as the front-runner in negotiations. 

“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft ,” said Microsoft in a statement earlier on Sunday. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

Microsoft said it would have made “significant changes” to TikTok to ensure security, privacy, online safety, and combatting disinformation.

The decision comes a little more than two months after President Donald Trump, citing national security concerns, announced in early August his intention to ban TikTok unless it was purchased by a US company. Speaking to reporters, Trump specifically mentioned Microsoft as a candidate — the only company the president explicitly referenced — making it the public front-runner to buy TikTok over the past month. An executive order formalizing the threat of a ban was issued on Aug. 6. A subsequent order required ByteDance to divest TikTok by Nov. 12.

Oracle’s interest in purchasing TikTok was reported weeks after Trump’s original executive order. “I think Oracle is a great company,” Trump said ahead of a rally in Yuma, Arizona, responding to the reports. “I think Oracle is someone that could handle it.” Trump also called Oracle cofounder Larry Ellison a “tremendous guy.”

Ellison is one of the tech industry’s most well-known Trump supporters. He hosted a fundraising event for the president back in February that caused some of Oracle’s workers to stage a walkout in protest.

A deal was said to be close earlier this month, though several barriers remained. ByteDance has said the AI-powered algorithm behind TikTok — arguably the app’s greatest asset — won’t be part of the deal, according to the South China Morning Post. In late August, China updated the country’s export-control rules to cover sensitive technology, suggesting ByteDance likely needed Beijing’s approval over any US deal. It’s unclear how Oracle’s partnership with ByteDance will address these potential hurdles, as made clear by CGTN’s Sunday report.

By Mark Serrels, CNET

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