ALL NEWS

TikTok owner picks Oracle over Microsoft as US tech partner

Sep 14, 2020, 5:48 AM | Updated: 5:51 am
TikTok Oralce...
FILE - This Feb. 25, 2020, file photo, shows the icon for TikTok in New York. TikTok's owner has chosen Oracle over Microsoft as its preferred suitor to buy the popular video-sharing app, according to a source familiar with the deal, Sunday, Sept. 13, 2020. (AP Photo/File)
(AP Photo/File)

The owner of TikTok has chosen Oracle over Microsoft as the American tech partner that could help keep the popular video-sharing app running in the U.S., according to a person familiar with the deal who was not authorized to speak publicly about it.

President Donald Trump’s administration has threatened to ban TikTok by Sept. 20 and ordered owner ByteDance to sell its U.S. business, claiming national security risks due to its Chinese ownership. The government worries about user data being funneled to Chinese authorities. TikTok denies it is a national security risk and is suing to stop the administration from enacting the threatened ban.

TikTok and the White House declined to comment Sunday. Oracle didn’t return a request for comment but has previously declined comment.

Walmart, which had planned to partner with Microsoft on the acquisition, said Sunday it “continues to have an interest in a TikTok investment” and is talking about it with ByteDance and other parties.

Much remains unclear about the proposed deal with Oracle, including whether it will only cover TikTok’s U.S. business, and, if so, how it will be split from the rest of TikTok’s social media platform, which is popular worldwide. ByteDance also owns a similar video app, Douyin, for the Chinese market.

Any deal must still be reviewed by the Committee on Foreign Investment in the United States, known as CFIUS, a U.S. government group chaired by the Treasury Secretary that studies mergers for national security reasons. The president can approve or deny a transaction recommended by the panel, though Trump has already voiced support for Oracle as a “great company” that could handle the acquisition.


Q&A: What does a deal between TikTok and Oracle mean?


Microsoft said in a Sunday statement that ByteDance “let us know today they would not be selling TikTok’s US operations to Microsoft.”

Microsoft added it was “confident our proposal would have been good for TikTok’s users, while protecting national security interests.” The company said it “would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation.”

TikTok, which says it has 100 million U.S. users and about 700 million globally, is known for its fun, goofy videos of dancing, lip-syncing, pranks and jokes. It’s recently become home to more political content such as the comedian Sarah Cooper, who drew a large audience by lip-syncing Trump’s often-disjointed statements from public appearances.

But the app has also raised concerns because of its Chinese ownership. The White House has cracked down on a range of Chinese businesses, including telecom equipment makers Huawei and ZTE and messaging app WeChat, over worries that they would enable Chinese authorities to access U.S. user data. Republican and Democratic lawmakers have raised concerns about censorship and children’s privacy.

TikTok denies that it has shared user data with the Chinese government or that it would do so if asked. The company says it has not censored videos at the request of Chinese authorities and insists it is not a national-security threat.

TikTok has sued to stop the ban, but not the sale order. The negotiations have been complicated by several factors, including Trump’s repeated demands that the U.S. government should get a “cut” of any deal, a stipulation and role for the president that experts say is unprecedented.

In addition, the Chinese government in late August unveiled new regulations that restrict exports of technology, likely including the artificial intelligence system TikTok uses to choose which videos to spool up to its users. That means ByteDance would have to obtain a license from China to export such technology to a foreign company.

“The Chinese government has implied it may block export of TikTok’s AI systems, so that might complicate a direct sale,” said Tiffany Li, a visiting professor at the Boston University School of Law.

She said that TikTok’s AI-backed video recommendation system is one of the app’s competitive advantages.

Whether the Oracle-TikTok deal will allow the sidestepping of Chinese export restrictions depends on which entity retains control of TikTok in the U.S., said Paul Haswell, a Hong Kong-based partner at law firm Pinsent Masons.

The deal had come together rapidly after the administration ramped up its threats against TikTok this summer, despite TikTok’s efforts to put distance between its app and its Chinese ownership. It installed former Disney executive Kevin Mayer as its American CEO, but he resigned in August after just a few months on the job, saying the “political environment has sharply changed.”

Both Microsoft and Oracle are known more for their business software offerings than for those intended for consumers.

Oracle primarily makes database software. It competes with tech giants such as Microsoft and Amazon that provide cloud services as well as business-software specialists like Salesforce.

Some analysts see Oracle’s interest in a consumer business as misguided. Oracle should focus on enterprise-market acquisitions and not invest in a consumer app like TikTok that doesn’t fit with the rest of its business, said Jefferies analyst Brent Thill, who compares the idea to Delta Airlines buying a motorcycle company. “It doesn’t make any sense,” he said.

Thill suggested that TikTok competitors like Facebook and Snapchat should be “cheering on Oracle” as a buyer, because Oracle wouldn’t “add a lot of value to the app.”

Oracle co-founder Larry Ellison is unusual among tech executives for his public support of Trump, hosting a fundraiser for him in February at his Rancho Mirage, California, estate. The company also hired a former top aide to Vice President Mike Pence; its CEO, Safra Catz, also served on Trump’s transition team.

The president said on Aug. 18 that Oracle was “a great company” that “could handle” buying TikTok. He declined to state his preference between Oracle and Microsoft as buyers.

__

AP technology writer Zen Soo in Hong Kong contributed to this report.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Today’s Top Stories

All News

Nicole Schmidt, mother of Gabby Petito, wipes away a tear during a press conference for SB117, a bi...
SAM METZ, The Associated Press

Petito family lobbies for ‘lethality assessment’ law in Utah

SALT LAKE CITY (AP) — When officers pulled over a van for speeding outside of Arches National Park in August 2021, they found a visibly distraught young couple in an emotional fight. Gabby Petito, 22, and her boyfriend Brian Laundrie, 23, were driving across the United States, and upon observing the couple, police officers in […]
7 hours ago
Utah State University researchers measure the temperature at minus 10 degrees in the Logan Canyon M...
Mark Jones

Monday morning’s cold temperatures nearly set new records

Cold temperatures Monday morning in northern Utah nearly set new records.
1 day ago
education legislation...
Mark Jones

One Utah lawmaker wants to ban cellphones in classrooms

One Utah lawmaker wants to ban cellphones in Utah classrooms.
1 day ago
Schools in the Cache County School District are on a 2-hour delayed start on Tuesday, Jan. 31, due ...
Devin Oldroyd

Freezing weather causes delayed start for Cache County School District schools

Schools in the Cache County School District are on a 2-hour delayed start on Tuesday, Jan. 31, due to weather conditions.
1 day ago
FILE - A doctor loads a dose of Pfizer COVID-19 vaccine into a syringe, Thursday, Dec. 2, 2021, at ...
Aimee Cobabe

Bill banning vaccine passports heading to Utah Senate

A bill to ban vaccine passports is heading out of the Utah House and into the Utah Senate. The bill is similar to a failed bill from 2022.
1 day ago
A two-vehicle crash Monday morning on U.S. Highway 40 claimed the life of a 19-year-old man. Photo ...
Mark Jones

Crash in Uintah County claims the life of a 19-year-old man

UINTAH COUNTY, Utah — A 19-year-old man died Monday morning in a two-vehicle crash on U.S. Highway 40 in Uintah County. The Utah Highway Patrol says the crash occurred near milepost 137 at 7:11 a.m. The UHP says a 2017 Nissan Rouge was heading westbound. The 19-year-old victim was the driver of the Nissan Rouge. […]
1 day ago

Sponsored Articles

Banner with Cervical Cancer Awareness Realistic Ribbon...
Intermountain Health

Five Common Causes of Cervical Cancer – and What You Can Do to Lower Your Risk

January is National Cervical Cancer Awareness month and cancer experts at Intermountain Health are working to educate women about cervical cancer, the tests that can warn women about potential cancer, and the importance of vaccination.
Kid holding a cisco fish at winterfest...
Bear Lake Convention and Visitors Bureau

Get Ready for Fun at the 2023 Bear Lake Monster Winterfest

The Bear Lake Monster Winterfest is an annual weekend event jam-packed full of fun activities the whole family can enjoy. This year the event will be held from January 27-29 at the Utah Bear Lake State Park Marina and Sunrise Resort and Event Center in Garden City, Utah. 
happy friends with sparklers at christmas dinner...
Macey's

15 Easy Christmas Dinner Ideas

We’ve scoured the web for you and narrowed down a few of our favorite Christmas dinner ideas to make your planning easy. Choose from the dishes we’ve highlighted to plan your meal or start brainstorming your own meal plan a couple of weeks before to make sure you have time to shop and prepare.
Spicy Homemade Loaded Taters Tots...
Macey's

5 Game Day Snacks for the Whole Family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The Best Tools for Deaf and Hard-of-Hearing Workplace Success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
TikTok owner picks Oracle over Microsoft as US tech partner