Tiktok Reaches Agreement to Sell Its US Business to Oracle, Not Microsoft

A source familiar with the talks said Oracle and TikTok had framed their agreement to address all of the group’s national security concerns.

Oracle and TikTok agreement
Tiktok sells its US business to Oracle. PHOTO via @NBCNews

Tiktok has reached an agreement with software company Oracle, a key agreement that could redefine how the United States and China will approach their domestic technology companies.

  • Tiktok will partner with Oracle in the United States, not Microsoft.
  • Until this weekend Microsoft was considered a leading runner to buy Tiktok in the US.
  • In November, Tiktok was cited as a national security threat.
  • On August 6, the U.S. Trump signed an executive order banning companies from trading in byte dance.

The Trump administration has expressed concern over concerns about a threat to national security. The deal, which was confirmed on Sunday by a direct source, came on the heels of pressure from Tiktok to sell the business. 

The administration, through its parent company Byte Dance, has been accused of handing over data on Americans if asked by the Chinese government about its relationship with China. Tiktok refused to hand over the data, insisting it was being stored outside of China.

Evidence does not specify which parts of Oracle technology will be acquired, which did not immediately respond to a request for comment on Sunday. Until this weekend Microsoft was considered a leading runner to buy Tiktok in the US. Microsoft had earlier said it had warned Byte Dance to execute its plan.

Tiktok to sell the business

In an interview with CNBC on Monday morning , Treasury Secretary Steven Mnuchin said the Oracle partnership had received a White House proposal from Tiktok.

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Byte Dance and Oracle face many more obstacles in concluding a deal. First, they are the United State’s largest source of foreign investment in the United States. Must be approved by the Committee, or the CFIS, an interactive body that oversees foreign investment in the United States.

A source familiar with the talks said the two sides [Oracle and TikTok] had framed their agreement to address all of the group’s national security concerns. Nonetheless, the deal remains vulnerable to major geopolitical tensions  between Washington and Beijing and could be thwarted if both governments consider an agreement politically favourable.

Tiktok spokeswoman Hillary McQuaid declined to comment, saying the company would not comment  on “rumors or speculation”.

The use of short-format video has exploded in popular culture over the past few years, with the likes of Facebook and Snapchat appearing in the US. Is one of the few recent social media bosses to provide a reliable competitor for the giants. This application, which gives users the ability to create short videos that are compatible with sound or music, has created its generation of celebrities and countless dance trends.

But its relations with China emerged as a peaceful debate in Washington last year. In November, Tiktok was cited as a national security threat , and the United States government opened an investigation. Since then, Secretary of State Mike Pompeo said he was “watching” the ban, and that President Donald Trump had repeatedly threatened to do so.

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“There is a reciprocal process going on here because China does not allow US technology companies like Facebook and Google,” said Paul Triolo, Eurasia Group’s head of global technology policy. “All of these measures are part of an effort by the US government to put pressure on the Chinese hawks to sever this, which involves a whole range of issues, but have been crystallized over the past three to six months by Chinese companies as unreliable. Sellers.”

On August 6, the U.S. Trump signed an executive order banning companies from trading in byte dance, accusing the app of endangering “national emergencies.”

The application, which is said to have been downloaded 175 million times, captures “vast amounts of information” and “threatens to allow Chinese government officials to monitor US governments,” the order said.

Oracle, TikTok agreement to address security concerns

Tiktok has repeatedly denied the allegations. It’s US user data is said it was stored at and only has a backup in Singapore. It states that its data centres are outside China and that the data is not subject to Chinese authority.

Cybersecurity experts say there is no evidence to date that China’s laws help its government to put pressure on companies such as Byte Dance to access user information. Also, the many US and other international organizations have access to similar user data.

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The executive order set a deadline Tuesday to finalize the sale. Thereafter, Tiktok will be disconnected in the United States based on the terms of the order.

Walmart has expressed interest in investing in Tiktok and said in a statement on Sunday that it was continuing discussions with the Byte Dance  leadership.

Tiktok last month sued the government, challenged the executive order and accused the administration of losing proper process when it issued the ban. The lawsuit alleges that the government failed to provide evidence that Tiktok was a national security threat. It was thought that the lawsuit could be settled out of court, with TikTok being given more time to defend.

When the company sells its U.S. business to Oracle, it is also subject to internal change.

Tiktok CEO Kevin Meyer announced his resignation in August after taking over the post in June. TikTok’s U.S. Vanessa Pappas, head of business, took over as interim president.

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