Oracle has secured a deal to become the short video app’s “trusted tech partner” in the US, Wall Street Journal reported. Details about the deal aren’t clear at the moment, including whether this is an outright sale of TikTok’s US arm, including its algorithms, or whether Oracle will only manage TikTok’s US cloud operations. Microsoft, another frontrunner to acquire TikTok confirmed its bid for the TikTok’s US arm was rejected by the app’s parent, ByteDance (more on that below).
Oracle’s name had first appeared in the list of TikTok suitors days after US President Donald Trump had signed an executive order on August 14, directing ByteDance to divest from its American assets within 90 days. Before that, on August 6, Trump had signed another executive order prohibiting US business with TikTok. It is worth noting that this report comes just days before September 20, when the August 6 executive order is scheduled to come in effect. While the Wall Street Journal did not specify the price of the deal, previous reports had suggested that the company was working out a proposed deal of $20 billion in cash and stock.
The development is also significant because right after Oracle had joined the race to acquire TikTok, Trump had openly backed the company. Oracle is reportedly partnering with General Atlantic and Sequoia Capital, two US-based investment companies, who have invested in ByteDance as well. Oracle’s co-founder Larry Ellison is a major Trump donor and had even held a fundraiser for him in February.
On September 13, Microsoft, which had reportedly partnered with Walmart to bid for TikTok, said that ByteDance won’t sell TikTok’s US operations to the company. It said that its proposal would have been “good for TikTok’s users” while “protecting national security interests”. Walmart, meanwhile, was looking to grow its ad business, hoping to boost its e-commerce division, with the acquisition. However, per the Journal, Walmart might still be interested in the deal, and could potentially join the Oracle group’s bid.
“[…]we would have made significant changes to ensure the service [TikTok] met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement,” Microsoft said in a statement. It is worth noting, however, that Microsoft has reportedly been interested in acquiring TikTok globally as well.
How the US effectively forced ByteDance to sell TikTok’s US arm
Last month, 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.
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.