Oracle has confirmed that it has won a bitterly contested battle against Microsoft with a deal to “serve as the trusted technology provider” for ByteDance, the Chinese owner of the video streaming social media darling TikTok.
“Oracle confirms (Treasury) Secretary (Steven) Mnuchin‘s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider,” Oracle said in a prepared statement today. The news sent Oracle stock up up 6.53 percent this morning, trading at US$60.72 a share.
In an interview on CNBC, Mnuchin said ByteDance has chosen Oracle to be TikTok’s U.S. technology partner. CNBC is reporting that Oracle will take a significant stake in the business.
The Oracle deal comes just four days before a deadline imposed by President Donald Trump for a sale of TikTok as a result of concerns about Americans’ personal data being shared with the Chinese government. Trump had threatened to ban the social media video-sharing application in the United States without a change in ownership.
Mnuchin told CNBC that the U.S. government plans to review the deal this week. “I will just say, from our standpoint, we’ll need to make sure that the code is…secure, Americans’ data is secure, that the phones are secure, and we’ll be looking to have discussions with Oracle over the next few days with our technical teams,” he said.
The Oracle confirmation comes after Microsoft revealed Sunday that its bid to acquire TikTok’s U.S. operations had been rejected.
In a statement posted on its website Sunday, Microsoft said its deal for TikTok is dead.
“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” the Redmond, Wash.-based tech giant said.
“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said. “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 Beijing-based ByteDance wants to structure the deal as a partnership rather than an outright sale amid political tension between China and the White House, Reuters reported this morning, citing people familiar with the negotiations.
Oracle would become ByteDance’s technology partner and take over the management of TikTok’s U.S. user data, Reuters reported, citing unnamed sources, which said that Oracle also is negotiating for a stake in TikTok’s U.S. operations.
ByteDance investors including General Atlantic and Sequoia also may get minority stakes, Reuters reported.
ByteDance had been in talks with Oracle and Microsoft, whose bid included retailer Walmart as a partner, about acquiring TikTok’s operations in the United States, Canada, Australia and New Zealand after U.S. President Donald Trump ordered a sale and said he otherwise would shutter the service in the United States, citing security concerns about U.S. user data.
A deal for TikTok, whose videos often go viral among its predominately younger users, would add to the videoconferencing portfolio of Oracle, which also has Zoom using its cloud services for its enterprise video communications platform.
Meanwhile, a report on CGTN, China’s state-run English television channel, said ByteDance would not sell its U.S. operations to Oracle or Microsoft nor give its platform source code to a foreign buyer after China changed its export regulations.