ByteDance (owner of TikTok) has reached a preliminary agreement with Oracle (an American company specializing in software and hardware) to make the TikTok app work in the United States after Microsoft’s offer was rejected, reports Financial Times (FT). According to the newspaper, this deal does not include the full sale of the app.
According to FT, Oracle intends to address some of Trump’s concerns about the Chinese company’s enforcement. Donald Trump has said TikTok could be used by China to locate federal officials, use data to blackmail and spy, according to The Guardian newspaper.
Beijing’s new rules make it difficult to sell TikTok in the United States
ByteDance shareholders must have a stake in the final deal, as a company source told FT. According to the same source, the investigations are still on the table and may still change.
However, there is not much time for negotiations, as Donald Trump threatened to ban TikTok as early as next Tuesday, September 15, unless there is a deal. However, the FT indicates that the decree the president signed was legally due on Sunday (September 20).
Any agreement reached must be approved by the governments of the United States and China. Neither party seems satisfied. The US President wants TikTok’s US operations to be completely sold; On the other hand, Beijing is opposed to the sale and would prefer the company to be closed, according to Reuters. Even at the end of August, China expanded the list of domestic technologies subject to tighter export controls to include rules on artificial intelligence products, which can make it difficult to sell the video application.
Halfway around the world, Chinese state media claim ByteDance will not sell TikTok’s algorithm in the United States to Oracle or any other company.
Tiktok shares users’ personal data with authorities. And Google and Facebook too
US and Chinese experts heard by FT and The Guardian doubt the deal will continue because Trump “constantly changes his mind” and a deal without major algorithm changes did not change the President’s concerns.
These negotiations have a long history, with Microsoft abandoning the purchase. On Sunday, the American company announced that its offer had been rejected, leaving Oracle as the only possible buyer. “We are confident that our proposal would have been good for TikTok users while protecting national security interests,” the company said.
The North American group Walmart (the largest retail company in the world), which was in negotiations with Microsoft, indicated that it continues to be interested in the application and remains in discussions with the Chinese company, specifies FT.
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According to FT, Oracle has a more difficult relationship with China than Microsoft. The tech company laid off more than half of its research and development team (around 900 employees) in China in 2019.
Oracle is in talks with investors from ByteDance, including General Atlantic and Sequoia Capital. Everyone involved declined to comment on the process.
Asia-Pacific stocks linked to US tech stocks rose on Monday following news that Oracle had bought TikTok.