Oracle to be TikTok's US operations partner; Microsoft bemoans Bytedance rejecting its bid

Enterprise services provider Oracle has been chosen as the US operations tech partner for popular video-sharing app TikTok, which Microsoft failed to acquire. While Tiktok has not confirmed the deal yet, multiple foreign media report claims that Oracle is set to be announced as TikTok’s “trusted tech partner” in the United States. It further mentions that the deal is “likely not to be structured as an outright sale” as against Microsoft's bid, which entailed a sale.

Tiktok’s unclear fate in America would come to an end if Oracle purchases the application’s US operations. The Tiktok-Oracle deal comes days before September 20, the day that the Trump administration set for a ban on the app’s operations if the company fails to reach an agreement with a buyer.

On Sunday, Microsoft announced that its bid for the US operations of TikTok was rejected by the app’s parent company, ByteDance. TikTok’s trouble around data security has been a flagship issue for the application, causing heavy loss in its overseas business. Earlier on June 29, TikTok was banned in India, along with 58 other apps, due to “national security and defence” issues. India was the biggest overseas market for TikTok.

Microsoft's statement on TikTok

"ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. 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," Microsoft has said.

READ | Microsoft Says Its Bid To Buy TikTok Has Been Rejected

What’s in it for Oracle?

In addition to Microsoft, a number of prominent tech companies such as Twitter, Google, and Walmart have rumoured to be interested in acquiring TikTok’s US operations. However, Oracle turned out to be the highest bidder, as per reports.

Growing out of its database roots, Oracle entered in marketing automation and cloud infrastructure. The company is not just a database creator and provider, but it is a massive operation, that earns revenue from data. Earlier during this pandemic, the Oracle teamed up with teleconferencing app Zoom. If the database provider forms the same kind of partnership with TikTok, it would extend its foray into consumer applications.

READ | ByteDance Unwilling To Sell TikTok's Algorithm, Wants US Buyer To Develop New Code: Report

It’s unclear how China would approve the Oracle deal as it is clearly unhappy with Tiktok’s forced sale. Two weeks ago, the Chinese government updated certain trade rules, blocking the export of AI technologies such as those used to personalize TikTok’s user feeds. Moreover, ByteDance is unwilling to part with the popular Chinese social media app's algorithm.

The deadline for the sale of TikTok expires on Tuesday, September 15. The exclusion of the algorithm from the sale of the app will greatly affect its value and thereby cause buyers to second guess their decision.

READ | China Accuses US Of Abusing National Security Concept To Force TikTok Sale

READ | Trump Wants 'cut' From TikTok Deal For Its Sale To United States Operations