Oracle will partner with social media platform TikTok in the United States, as a bid from Microsoft was rejected.
The terms of the Oracle deal have not yet been made public, but it is unlikely to be an outright sale. It comes just ahead of a September 15 deadline set by the Trump administration, after which the US President has said TikTok’s American operations must be sold or shut down.
Microsoft had long courted TikTok’s Chinese owner ByteDance, and were allegedly preparing to team with retail giant Walmart on a deal for the app. In a blog post published yesterday (September 13), Microsoft claimed its 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,” continued the blog.
Donald Trump has made TikTok, a video-posting app with around 800 million users worldwide, a cornerstone of his ongoing trade war with China. Trump administration officials claim the platform is a national-security threat. They point out that the company is obliged to share data with the Chinese politburo, or censor speech sensitive to its ruling Communist Party (CCP).
ByteDance denies the accusations. But since an August 6 executive order signed by Trump, which would wind up TikTok’s US operations unless an American company bought it, the appmaker has courted potential investors.
TikTok has also sued the Trump administration over one of the executive orders, which it calls “heavily politicized.” September 20 marks another stage in the saga, with US Commerce Department heads deciding which business operations involving TikTok, if any, will be banned according to the August 6 orders.
How Oracle will allay White House fears over TikTok’s security is unclear. Going by previous foreign-ownership acquisitions, it could ringfence data on US users, or appoint American citizens to ByteDance’s board.
The CCP could provide one last hurdle to the deal, as it ponders retaliatory measures against the sale of Chinese companies to foreigners. “Without any evidence and under the pretext of national security, they abuse state power and conduct unreasonable suppression and intimidation of non-US companies that have achieved a leading edge in a certain field,” Chinese foreign ministry spokesperson Wang Wenbin told CNN.
“We will firmly support relevant companies to safeguard own legitimate rights and interests.”