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Microsoft reportedly loses to Oracle in TikTok bid

Written by Wency Chen Published on 

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However, the sale of TikTok probably won’t proceed without an agreement between Beijing and Washington.

Software giant Oracle has won the deal for the US operations of ByteDance’s TikTok, beating Microsoft, which announced that its proposal was rejected, the Wall Street Journal reported on Sunday, citing sources.

Microsoft said last month that it was in talks with the short video app owner ByteDance over a purchase of its services in the US, along with those in Australia, Canada, and New Zealand. Retailer Walmart later joined the bid. On Sunday however, the tech powerhouse said in a blog post that “ByteDance let us know they would not be selling TikToks US operations to Microsoft.”

“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” reads the statement. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”

Meanwhile, Oracle is set to become TikTok’s “trusted tech partner” in the US, according to the WSJ report, although details haven’t been disclosed yet. The deal is likely not to be structured as an outright sale, and still needs approval from the White House and the Committee on Foreign Investment in the US (CFIUS). This bid was reportedly driven by General Atlantic and Sequoia Capital, two major investors of ByteDance.

While Oracle looks inexperienced in social media platform management and not like an obvious beneficiary of a TikTok buyout, it aims at the service to boost its cloud-computing business. The company has also close connections with the Trump administration. Larry Ellison, Oracle’s co-founder, chairman, and largest shareholder, earlier this year organized a fundraiser at his home for Mr. Trump.

“No extension”

Amid the intensifying geopolitical tension between the US and China, the Trump administration targeted the short video app and its Chinese parent company, citing data privacy and national security concerns. The president threatened to ban TikTok if ByteDance fails to sell it by September 15. He emphasized on Sept 11 that “there will be no extension.” A second deadline regarding a ban on all transactions between Americans and ByteDance is set for September 20.

The Chinese government also intervened. Beijing issued new export restriction rules in August, including “personalized content-recommend technology based on data analysis,” the algorithm behind the app, into the catalog. ByteDance will not sell or transfer the TikTok algorithm in any sale or divestment deal, the South China Morning Post reported on Sunday, citing unidentified sources. If President Trump is rejecting it, there will be no possibility of selling TikTok and the app could turn dark for American users after the Tuesday deadline, according to the report.

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