• Sat. Sep 19th, 2020

Dimancherouge

Technology

TikTok rejects Microsoft, taps Oracle as US partner

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Chinese tech company ByteDance owns short-form video app TikTok.


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After over a month of negotiations, TikTok has chosen a US company to partner with: Oracle, a California-based cloud computing giant. 

On Sunday Microsoft, long tapped to purchase the ByteDance-owned app, announced its bid had been rejected by the Beijing-based company. ByteDance instead selected Oracle to be its “technology partner” in the US, a person familiar with the situation said on Sunday evening. The proposed deal is expected to meet the needs of TikTok’s users, as well as satisfy American national security concerns, the person said.

“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.”

“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. We look forward to seeing how the service evolves in these important areas.”

Citing national security concerns, President Donald Trump announced his intention to ban TikTok, unless it was purchased by a US company, during a press conference on Aug. 4. Speaking to reporters, Trump specifically mentioned Microsoft as a candidate — the only company he explicitly referenced — making it the public frontrunner to buy TikTok over the past month. His executive order formalizing the ban threat was issued two days later. TikTok’s original deadline to find a US buyer was Sept. 15, but a subsequent executive order pushed that date back to Nov. 12.

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

Ellison is one of the tech industry’s most known Trump supporters, hosting a fundraising event for the president back in February that caused some of Oracle’s workers to stage a walk out in protest. 

A deal was said to be close to being struck earlier this month, but several barriers had been raised. ByteDance has said the AI-powered algorithm that powers TikTok, arguably the app’s greatest asset, won’t be part of the deal, reports the South China Morning Post. In late August, China updated the country’s export-control rules to cover sensitive technology, meaning ByteDance likely needed Beijing’s approval over any US deal. How Oracle’s partnership with ByteDance circumvents these hurdles is yet to be known. 

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