Oracle Corp. beat Microsoft Corp. in a bid to take over TikTok’s video-sharing app’s U.S. operations Sunday (Sept. 13) days before President Donald Trump threatened to shut it down, The Wall Street Journal reported.
China-based ByteDance Ltd., TikTok’s parent company, rejected Microsoft’s offer, the newspaper reported based on anonymous sources. The terms of the deal are unclear.
Oracle is set to be named as TikTok’s “trusted technology partner” in the U.S., and the transaction is unlikely to be structured as an outright sale, the source told the WSJ.
In its blog, Microsoft wrote ByteDance told the Redmond, Washington-based tech giant that it was not selected as the buyer.
“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.”
Also Sunday, the South China Morning Post reported ByteDance wouldn’t sell its essential algorithm for the video-sharing app TikTok in any manner. One of the main concerns has been the programming code at the heart of the app, which decides who gets what content.
Trump issued an executive order on Aug. 6, prohibiting American companies from conducting business with ByteDance and ordered the sale of its California’s headquarters to a U.S. company by Sept. 20. The president later issued a second directive giving ByteDance a few weeks after that to close a sale.
The president has claimed the app presents a security risk as the firm could relay information about users to the Chinese government. A Chinese Commerce Ministry spokesperson told reporters at a press conference that the claims are without merit.
The news follows a Reuters report Friday (Sept. 11) that said the People’s Republic of China would instead shutter TikTok’s U.S. headquarters than sell it to an American company because government officials say a forced sale would make China look weak under pressure from the Trump administration.
Founded in 2012, ByteDance has raised billions of dollars in funding, valuing it at $100 billion, according to PitchBook Data Inc., a Seattle-based researcher. Its investors include SoftBank’s Vision Fund, NEA, Tiger Global Management, KKR and GGV Capital.