TikTok’s Chinese parent company ByteDance has reportedly chosen Oracle as a “technology partner” for its US operations after Microsoft’s bid to buy the platform’s American branch was rejected.
As reported by The Washington Post, two anonymous sources said that Oracle was chosen on Sunday (September 13) to be TikTok’s technology partner, and that the companies had brokered a deal to alleviate criticism brought on by the Trump administration.
The sources said that TikTok recently put forward a proposal to the US Government that would allow ByteDance to retain ownership of the app, but outsource cloud management of its US user data. It was not clear how much of TikTok’s US operations would still be owned by ByteDance and its investors.
Additionally, Bloomberg reported that ByteDance wouldn’t sell or transfer TikTok’s algorithm in any sale or divestment, but the company’s US-based technology team would, however, be free to develop a new one.
Speaking to The Washington Post, a former US official said that while the proposal may alleviate some security concerns, it didn’t match Donald Trump’s initial order for ByteDance to divest from TikTok’s US operations.
“It’s well short of a US company taking over the asset and the algorithm, and politically, it would be a massive climb-down from what the president said he was going to accomplish with this,” said the official.
The deal will have to be approved by both Beijing and Washington before it can go ahead.
Microsoft, which was in talks to purchase TikTok’s American arm, announced yesterday (September 13) that its proposal was declined.
“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” the company wrote in a blog post.
“To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement.”
In August, Trump threatened to ban TikTok by September 15 if it wasn’t sold off to an American company, on the grounds that it was a threat to national security in the US.
A few weeks later, TikTok announced it was suing the President, saying it had “no choice but to take action to protect our rights”. TikTok’s CEO, Kevin Mayer, quit his role at the company shortly after.