Report: Oracle Beats Microsoft in Bid for TikTok

TikTok video app
AFP/Getty

Oracle has won the bidding to take over the U.S. operations of the Chinese-owned social media app TikTok, beating out Microsoft in a deal to allow the platform to continue operating in the United States. According to some sources familiar with the deal, it is closer to a “partnership” than an outright acquisition.

The Wall Street Journal reports that Oracle has won the bidding for the U.S. operations of the popular Chinese-owned video-sharing app TikTok according to people familiar with the matter. Oracle has beaten tech giant Microsoft which initially expressed interest in purchasing the app.

Oracle is reportedly set to be announced as TikTok’s “trusted tech partner” in the United States and the deal will not likely be structured as a direct sale according to sources. The deal must now be approved by the White House and the Committee on Foreign Investment in the United States to approve the deal. One source stated that the participants in the deal believe it satisfies the concerns around data security raised by members of the U.S. government.

The deal comes shortly after the Chinese government issued new export restrictions late last month which threw the deal into question. The restrictions related to the same type of artificial intelligence technology that TikTok uses. The algorithms used by TikTok to serve videos to users were considered part of the deal negotiations up until the Chinese policy change raised questions among the parties involved over the valuation of the company.

Two people familiar with the Oracle deal claim that it is more accurately described as a partnership rather than an acquisition. Some of the investors in TikTok’s parent company, ByteDance, including U.S. investment firms Sequoia Capital and General Atlantic, will receive stakes in the venture as part of the deal according to sources.

Microsoft, which had partnered with Walmart to bid on the app, stated that it was notified of the decision by ByteDance. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said in a statement. “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.”

Read more at the Wall Street Journal here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com

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