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Walmart and Microsoft are reportedly partnering to buy TikTok; Oracle’s chances look strong too

Walmart is reportedly teaming up with Microsoft to bid for acquiring TikTok, even as a report suggested that Oracle has emerged has the frontrunner to acquire the popular short video app from Chinese parent ByteDance. According to CNBC, which first reported Walmart’s interest in TikTok, the company believes that acquiring TikTok will help it to serve its omnichannel customers, as well as grow its ad business, which is expected to boost Walmart’s e-commerce division. ByteDance, meanwhile, is reportedly nearing a deal to sell TikTok’s US business in the coming days.

Not Walmart’s first partnership: In fact, before partnering with Microsoft, Walmart had teamed up with Softbank and Alphabet, according to another CNBC report. This deal would reportedly have put Walmart as the lead buyer, with SoftBank and Alphabet acquiring minority stakes. The retailer also wanted to be the exclusive e-commerce and payments provider for TikTok and have access to user data. However, the US administration reportedly wants the lead buyer of TikTok to be a technology company so that user data could be stored in the US. Walmart doesn’t have a cloud technology component, which is possibly why it has decided to team up with Microsoft so that user data can be stored on the company’s Azure cloud setup. TikTok has repeatedly said that it stores all Americans’ data in the US and Singapore.

Oracle’s chances of buying TikTok look strong: According to The Wrap, Larry Ellison’s Oracle also looks in prime position to acquire TikTok, for a proposed deal of $20 billion in cash and stock. The proposed deal will include $10 billion in cash, $10 billion in Oracle stock, and 50% of annual TikTok profit to flow back to TikTok’s China-based parent company, ByteDance, for two years, according to The Wrap. Oracle is reportedly partnering with General Atlantic and Sequoia Capital, two US-based investment companies, who have invested in ByteDance as well. Ellison is a major Trump donor and had even held a fundraiser for him in February. Trump, for his part, has lent his support to Ellison, backing Oracle’s acquisition of TikTok.

TikTok’s CEO has quit: Walmart’s announcement had come right after TikTok’s CEO Kevin Mayer quit the company, following Trump’s orders of a ban on the app through two executive orders. On August 14, Trump signed an executive order directing ByteDance to divest from its American assets and its rights to any user data that TikTok gathered in the country, within 90 days. It also directed ByteDance to destroy any TikTok data of US users, and report to the Committee on Foreign Investment in the United States (CFIUS) once all the data is destroyed. The sale of TikTok to a third party will also have to be vetted by CFIUS for all practical purposes.

Before that, on August 6, Trump had prohibited all US transactions with TikTok within 45 days. However, in response to this August 6 directive, TikTok sued the US government, calling the app ban “unconstitutional” and “political”. TikTok said that it had taken “extraordinary measures” to protect the privacy and security of TikTok’s US user data including storing such data outside of China, in the US and Singapore. It further said that the executive order failed to follow due process and act in good faith, neither providing evidence that TikTok was an actual threat, nor justification for its punitive actions. It had further cited its American senior management, including CEO Mayer, in the lawsuit to argue that as American citizens, they are not subject to Chinese law.

A day before the government of India had banned TikTok and 58 other Chinese apps in the country, Mayer had sent a letter to the Indian government that said that the Chinese government had never requested user data of Indians, and the company would not turn it over if asked.

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