Oracle has reportedly won the bid to manage TikTok's US operations. The California-based software company beats out another software giant Microsoft in the bidding process that was on for a better part of the past two months. Walmart was also reportedly interested in acquiring the popular short-form video-sharing app.
ByteDance, the Chinese parent of TikTok, has selected Oracle as its "trusted tech partner" in the US, The Wall Street Journal reports. The deal is likely not an outright sale, the report cites an unidentified person familiar with the matter. This suggests that TikTok will now operate over Oracle's cloud services in the US. This new operation structure should do enough to satisfy President Donald Trump's security concerns.
The American government was of concern that its Chinese counterpart may have access to TikTok's user data, which poses a threat to national security. The Trump-led administration wanted ByteDance to divest the app's US operations to an American company.
ByteDance had until September 15th to salvage its US business or face a nationwide ban. The Chinese firm has now managed to strike a deal just days ahead of the deadline.
Oracle beats Microsoft to manage TikTok in the US
News of Oracle winning the TikTok bid comes just after Microsoft announced that its bid was rejected by ByteDance. Along with the US, the Windows maker was also pursuing a deal to acquire TikTok in Australia, Canada, and New Zealand. However, ByteDance seemingly wasn't willing to sell off the entire business. Instead, the company has chosen Oracle as a "trusted" technology partner.
"ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft," the company said in a statement. "We are confident our proposal would have been good for TikTok's users while protecting national security interests. 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."
However, ByteDance reportedly didn't even ask Microsoft to revise its deal following the recent involvement of the Chinese government. The Beijing officials have put restrictions on the export of TikTok's AI technology. This essentially blocked an outright sale of the company and gave Oracle an upper hand in negotiating as a partner.
Oracle has collaborated with the US government in the past as well. President Trump himself was very supportive of the company's interest in TikTok and this may have played in its favor. It'll be interesting to see how the new TikTok operates in the US now.