ByteDance’s bid to retain ownership of TikTok in the United States through a “partnership” with Oracle faces long odds of winning White House approval, according to former national security advisors and regulatory lawyers interviewed by Reuters.
After spending months exploring a deal to sell off TikTok’s U.S. operations to a Microsoft or another American firm, China-based ByteDance has shifted gears over the past week, unveiling a proposal over the weekend under which Oracle would be its “trusted technology partner.”
However, that appears to fall far short of President Donald Trump’s demands for an outright sale, with the Trump Administration concerned over ByteDance’s ties to the Chinese government and its potential access, through TikTok, to the personal data of tens of millions of U.S. consumers.
Meanwhile, Microsoft on Sunday confirmed that its offer to buy TikTok’s U.S. operations has been turned down.
Under its proposed partnership with Oracle, ByteDance would retain majority ownership of TikTok globally, while forming a new, U.S. headquarters, according to Reuters.
A panel chaired by the Treasury Department — the Committee on Foreign Investment in the United States (CFIUS) — is now reviewing the proposal.
But according to one top former committee official interviewed by Reuters, the odds are stacked against the plan winning CFIUS approval.
“After CFIUS made a recommendation to the President and the President issued an executive order requiring divestment, it would be unprecedented for the parties to negotiate a solution short of a divestment, though it would clearly be within the authority of the President to modify his order,” Aimen Mir, who oversaw CFIUS reviews between 2014 and 2018 as deputy assistant secretary for investment security at the U.S. Department of the Treasury, and is now a partner at law firm Freshfields Bruckhaus Deringer, told Reuters.
Trump has already thrown a damper on prospects for a potential deal, telling reporters on Wednesday (Sept. 16) that if ByteDance retains majority ownership of TikTok, “I am not going to be happy with that,” Reuters reported.
For its part, China says it would also have to approve any proposed sale or deal involving TikTok, The Wall Street Journal reports.