Business World

Oracle wins bid to partner with TikTok’s US business

Oracle beat Microsoft in the battle for the U.S. arm of TikTok with a deal structured as a partnership rather than an outright sale to try to navigate geopolitical tensions between Beijing and Washington, Reuters reported.

ByteDance, TikTok’s Chinese owner, had been in talks to divest the U.S. business of its hugely popular short-video app to Oracle or a consortium led by Microsoft Corp after U.S. President Donald Trump ordered the sale last month and said he might otherwise shut it down.

While TikTok is best known for dancing videos that go viral among teenagers, U.S. officials are concerned user information could be passed to China’s Communist Party government. TikTok, which has as many as 100 million U.S. users, has said it would never share such data with Chinese authorities.

Sale negotiations were upended when China updated its export control rules last month, giving it a say over the transfer of TikTok’s algorithm to a foreign buyer. Reuters reported last week that China would rather see TikTok shut down in the United States than allow a forced sale.

On Monday, China’s state-run English television channel CGTN cited sources as saying ByteDance would not sell TikTok’s U.S. operations to Oracle or Microsoft, and would not give the source code for the platform to any U.S. firm.

Under ByteDance’s latest proposal, Oracle would be the firm’s technology partner and assume management of TikTok’s U.S. user data, Oracle is also negotiating taking a stake in TikTok’s U.S. operations.

The data is currently stored in Alphabet Inc’s cloud.

Some of ByteDance’s top investors, including General Atlantic and Sequoia, will also be given minority stakes in those operations.

Mnuchin said the deadline to approve a deal was Sept. 20 and that the current proposal included a commitment to create a U.S. headquartered company with 20,000 new jobs.

The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for national security risk, is overseeing the ByteDance-Oracle talks and Mnuchin said there would also be a separate national security review by the Trump administration.