TikTok chose the Oracle’s bid against Microsoft’s proposal, giving Oracle rights as their U.S. technology partners. Oracle surprised everyone by coming out victorious in the request. TikTok made deal due to Trump administration threats to close the app in the U.S.
Also, Read This: Facebook launches its TikTok copycat on Instagram.
The Trump administration from a long time threatens the TikTok management to change the ownership. Trump threatens the company to ban the app. Due to this situation, the CEO of TikTok resigned recently.
To follow that read this post: TikTok’s CEO quits the company just months after the appointment.
The people, who spoke on the condition of anonymity to discuss the deliberations freely, said that TikTok recently put forward a proposal to the U.S. government that would allow its Chinese parent company, ByteDance, to retain ownership but outsource cloud management of the data. One of the people said that TikTok chose Oracle as its U.S. “technology partner” Sunday afternoon and that the companies brokered the deal in an attempt to satisfy regulator concerns.
ByteDance is also considering to move its headquarters out of China to avoid any further issues in the future. Oracle’s executives have close ties to the president, and the company may be well-positioned to meet Trump’s expectations after the president took an active role in raising concerns about TikTok. The deal would probably involve Oracle, a business software giant best known for selling database technology to corporations to help run their operations, taking a stake in the company, one of the people said.
President Trump previously issued an order that would ban the app in the United States beginning Sept. 20. He followed that with a second-order that would essentially require parent company ByteDance to divest from its operations in the United States.
TikTok has repeatedly insisted that it is not a national security threat and that it does not share any U.S. customer information with the Chinese government.
Both Microsoft and Oracle were bidding for the business, which has surged in popularity, particularly with young users. TikTok had 91.9 million monthly active users in the United States in June, up from 26.7 million in February 2019.
The TikTok deal has been facing a series of obstacles for more than a month and was thrown another hurdle in recent weeks when the Chinese government got involved, slowing the bidding process. Beijing established export rules that prevent the sale of some artificial-intelligence technology that probably includes TikTok’s personalized recommendation algorithm.
The algorithm is TikTok’s secret sauce, a technology that makes the service so popular and addictive to its users. Without it, the company’s value to an acquirer, significantly diminished.
TikTok previously filed a legal challenge against the government’s order to ban the video app. If the ban proceeds, TikTok users in the United States would probably still be able to use the app if they had already downloaded it, but wouldn’t be able to get any updates.
The parameters of the ban are still unclear, and it is up to the Commerce Department to define them.