July 28, 2021

TikTok chooses Oracle much to Microsoft’s chagrin

The TikTok soap opera in the United States is said to be about to come to an end. According to Reuters information, the Chinese application would have concluded an agreement with Oracle to save its activities in the United States, but not in the format of a traditional takeover. The two companies preferred to lay the foundations for a “trusted technological partnership”, which would allow ByteDance to continue to operate TikTok on American soil, relying on Oracle cloud technologies.

TikTok under high pressure in the United States

When Donald Trump announced in early August 2020 that he wanted to ban TikTok in the United States, the Chinese application had to resolve to sell its American activities to a firm from the country of Uncle Sam. Microsoft then quickly positioned itself to take charge of the head of the social network, just like Oracle, which then stood out as a serious competitor.

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If the choice was already proving difficult for TikTok, to that had to be added a decision deadline of only 90 days imposed by the White House, as well as new regulations requiring companies based in China to obtain a license from the share. of Beijing before carrying out exports or technological transactions.

Despite these many and important difficulties, TikTok reportedly finally made its decision just one day before the deadline of September 15, 2020, imposed by the government of Donald Trump. Against all odds, it is Oracle who would be in pole position to win the race.

For his part, Microsoft has officially announced the rejection of its offer after several weeks of talks: ByteDance let us know today that it will not sell TikTok’s US business to Microsoft. We are convinced that our proposal would have been good for TikTok users, while protecting the interests of national security “, explained the owner of Windows in a press release.

Oracle saves TikTok, but not thanks to a classic buyout

As we have previously pointed out, Oracle wins the race, but not in the form of an outright buyout since no major asset swap would be involved. Indeed, rather than acquiring all of TikTok’s US activities, Larry Ellison’s company preferred to offer a “trusted technological partnership“to ByteDance. In short, this means thatOracle reportedly helps Chinese company run TikTok US operations, relying on its cloud technologies.

It remains to be seen whether this solution will be enough to reassure the White House, which fears that TikTok is a “spy“in the service of the Chinese government. Note that Larry Ellison’s relationship with Donald Trump could unofficially weigh in the balance. Indeed, the CEO of Oracle is a fervent defender of the American president, to the point of having organized a fundraiser for him in February 2020. For his part, Donald Trump has in the past called Larry Ellison “great guy“, considering at the same time that Oracle was a”big business“.