Oracle by the US Bid for TikTok, defeats Microsoft
Oracle Corp. won the bidding for the U.S. operations of the video-sharing app TikTok, people familiar with the matter said, beating out Microsoft Corp. in a high-profile deal to salvage a social-media sensation that has been caught in the middle of a geopolitical standoff.
A deal with Oracle for TikTok's U.S. operations may end up including a partnership instead of an outright purchase.
With its deadline to sell or be banned in the U.S. fast approaching, Chinese tech giant ByteDance said it will not be selling its video-sharing app TikTok to either Microsoft or Oracle, according to China state TV.
Separately, Oracle said in a statement that it is "part of a proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will operate as a trusted technology provider."
Microsoft said on Sunday that ByteDance informed the company that Tiktok's bid for its US operations had been rejected.
The $ 1.5 trillion company Microsoft was seen as the most likely buyer due to its vast resources and long history of doing business with the federal government.
"We are confident our proposal would have been good for TikTok's users, while protecting national security interests," a Microsoft spokesman said. "To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation. ... We look forward to seeing how the service evolves in these important areas."
The Wall Street Journal reported Sunday that Oracle was in negotiations to be TikTok's "trusted tech partner," an ambiguous relationship that did not involve an outright sale of the platform, according to the Journal.
Reuters, citing unidentified sources, reported that Oracle would "assume management of TikTok's U.S. user data. Oracle is also negotiating taking a stake in TikTok's U.S. operations."
Oracle, a software company that sells database products and cloud computing services to businesses, did not return a request for comment.
Any potential sale of the app, known for short viral videos of lip-syncing and dance challenges, has been banned by China's recent decision on how artificial intelligence technology can be exported from the country.
The move means that any deal for TikTok might not include the app's sophisticated algorithm, seen as the secret ingredient to its success.
Wedbush analyst Daniel Ives said Microsoft likely was only interested in acquiring TikTok with its algorithm, which ByteDance may have resisted.
"Given the need now to get a green light from Beijing after its export rules were changed a few weeks ago, TikTok's days in the U.S. likely are numbered with a shutdown now the next step," Ives said. "Unless there are some last minute changes, ByteDance heads into the White House deadline this week with some dark days ahead as the plug now likely gets pulled on the TikTok app within the U.S."
For months, the Trump administration has been pressuring TikTok to divorce itself from its Beijing parent company, ByteDance, as officials in Washington fear the Chinese government could use the video app as a tool to spy on Americans.
Tickcock's attorneys have filed a legal challenge to Trump's executive order prohibiting transactions between BiteDance subsidiaries and American businesses, saying the move is unconstitutional and rooted in speculation.
Super hit during the epidemic, TickTalk has been downloaded over 100 million times in the US. The company says it has taken steps to protect the data of Americans, which the company says is mostly in the U.S.
Concern that the Chinese government could use such data is unfounded, with TikTok claiming for a long time that government officials in Beijing have never asked for data on Americans and if any such request was made , Then the company will deny it.
