TikTok chooses Oracle over Microsoft for its US operations: report

ByteDance has picked Oracle as its partner to manage its US operations while rejecting Microsoft's bid to acquire TikTok.

Highlights
  • Tiktok rejected Microsoft’s bid to acquire its US operations
  • Oracle will help TikTok with its cloud business operations
  • The deal should not be considered as an outright sale

ByteDance-owned short-video platform, TikTok, has reportedly selected Oracle as its ‘trusted tech partner’ to manage the company’s US cloud operations. US President Donald Trump issued an executive order to ban the popular Chinese application and the only way to avoid it was to sell its business to an American company. Microsoft was in advanced talks with TikTok to buy its operations in the US, however, its bid was rejected by ByteDance. The tech giant presented a deal to TikTok to buy its overseas operations including the US, Australia, Canada, and New Zealand.

Also read: Banned! TikTok, ShareIt, Clash of Kings, CamScanner among 59 Chinese apps banned in India

Oracle Wins Bid for TikTok’s US operations

As per a report by The Wall Street Journal, TikTok has chosen Oracle over Microsoft to be its app’s technology partner for its US operations. The report says that the deal is likely not structured as an outright sale. However, it is still unknown whether Oracle would take a majority of the stake of the short-video platform or just manage the data of the application. The deal must still be reviewed by the Committee of Foreign Investment in the US. As per the report, Oracle will help TikTok run its US operations with its cloud technologies.

TikTok says no to Microsoft

Microsoft has confirmed that it is not acquiring TikTok’s US operations after its bid was rejected by ByteDance. “ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” the Redmond-based company said in a statement. “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.”

The whole matter came into limelight when US President Donald Trump passed an executive order to ban the TikTok application. The US government gave a deadline of September 15th to either sell its US operation to an American company or face a threat of a potential ban. Adding Oracle as its trusted technology partner could help the company overcome the concerns around the data security that has been raised by the US government. TikTok has been already banned in India along with 59 Chinese applications due to the “emergent nature of threat” they pose. Following the government order, the app was removed from Google Play Store and Apple App Store in the country.