Oracle Corp said on Monday it would team up with China’s ByteDance to keep TikTok operating in the United States, beating Microsoft Corp in a deal structured as a partnership rather than an outright sale.
ByteDance, TikTok’s Beijing-based owner, had been in talks to divest the U.S. business of its hugely popular short-video app to Oracle or Microsoft after U.S. President Donald Trump ordered the sale last month and said he might otherwise shut it down.
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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. China would rather see TikTok shut down in the United States than allow a forced sale.
Oracle said it was part of a proposal submitted by ByteDance to the U.S. Treasury Department over the weekend in which Oracle would serve as TikTok’s “trusted technology provider.” Oracle shares were up 6.3%.
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Under ByteDance’s latest proposal, Oracle would assume management of TikTok’s U.S. user data. Oracle is also negotiating taking a stake in TikTok’s U.S. operations, the sources added. The TikTok user data is currently stored in Alphabet Inc’s cloud, with a backup in Singapore.
Some of ByteDance’s top investors, including General Atlantic and Sequoia, will also be given minority stakes in those operations, one of the sources said.
PRECEDENT
It is unclear whether Trump, who wants a U.S. technology company to own most of TikTok in the United States, will approve the deal. U.S. Treasury Secretary Steven Mnuchin told CNBC on Monday the administration would review it this week.
