Oracle Is Expected to Become TikTok's U.S. 'Tech Partner'

Tech giant Oracle is expected to become the technology partner for TikTok in the United States after the Chinese owners of the social media app rejected a bid from Microsoft, The Wall Street Journal reports.

A deal is not yet final, and it’s not expected to be an outright sale from TikTok’s parent company Bytedance — rather, Oracle is primed to become TikTok’s “trusted tech partner” in the United States. The specifics of what that entails remain unclear, though Oracle is reportedly confident that its bid satisfies the various TikTok-related data and security concerns raised by the U.S. government.

The news of Oracle taking pole position broke just days before a September 15th deadline President Donald Trump had set in an executive order demanding ByteDance divest from its U.S. ownership, or face being banned from the country. The Trump administration cited national security concerns as the reason for the EO due to TikTok and ByteDance’s alleged ties to the Chinese government. Among the issues are the security of American users’ data and control over TikTok’s underlying code and algorithm, which comes with the ability to potentially assist or stymie the spread of certain information and content.

On Monday, September 14th, Treasury Secretary Steve Mnuchin told CNBC that his office received a bid from Oracle and that the Committee on Foreign Investment will be reviewing it this week. Mnuchin said the data and security issues would be key to the federal government’s review: “From our standpoint, we’ll need to make sure that the code is, one, secure, Americans’ data is secure, that the phones are secure and we’ll be looking to have discussions with Oracle over the next few days with our technical teams.”

Since Trump issued his Executive Order in August, Microsoft had seemed the most likely company to buy or partner with Tiktok. Up until it announced ByteDance had rejected its bid Sunday, Microsoft had been adamant on taking control of TikTok’s code, partly to satisfy security concerns. But at the end of August, the Chinese government changed regulations to stipulate that any company, like TikTok, wishing to sell its tech to a foreign buyer would have to get explicit permission from Beijing.

In the statement it released Sunday, Microsoft said, “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests. 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. We look forward to seeing how the service evolves in these important areas.”

But while Microsoft seemed primed to partner with TikTok, Oracle’s emergence isn’t that surprising. Trump notably showed his support for an Oracle bid last month, praising the company and its owner, Larry Ellison, adding, “I think that Oracle would be certainly somebody that could handle it.” Ellison is also a major Trump donor, hosting a fundraiser for the president earlier this year, while Oracle CEO Safra Catz served on Trump’s transition team in 2016.

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