Ayyyeee… What’s Goodie Everyone. So I got some tea and it involves The app TikTok.
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 on Sunday and that the companies brokered the deal in an attempt to satisfy regulator concerns.
According to two of the people familiar with the deal is that ByteDance could move its headquarters outside of China to alleviate concerns that the parent company would be subject to Chinese laws that require firms, if directed, to share data in their systems with the government.
Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, who spoke late last week, are open to hearing the offer, said a senior administration official, speaking on the condition of anonymity because of the matter’s sensitivity.
A former U.S. official said that while such an approach might address some of the security concerns, “it’s well short of a U.S. company taking over the asset and the algorithm, and politically, it would be a massive climb down from what the president said he was going to accomplish with this.”
Microsoft and Oracle were bidding for the business, which has surged in popularity, especially 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.
Microsoft said in it’s blog post on Sunday that its offer to acquire TikTok‘s U.S. operations was rejected. Microsoft was the first to confirm that it was courting TikTok this summer as Trump threatened to ban the app over national security concerns.
Oracle’s executives have close ties to the president Trump, 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, according to someone familiar with the situation.
President Trump had previously issued an order that would ban the app in the United States on September, 20th. He followed that with a second order that would essentially require parent company ByteDance to divest from its operations in the United States.