To avoid TikTok's sale in US, ByteDance partners with Oracle: Report

Microsoft loses out; Chinese media stresses American operations won't be sold to any firm

Oracle beat Microsoft in the battle for the US arm of TikTok with a deal structured as a partnership, rather than an outright sale, to try to navigate geopolitical tensions between Beijing and Washington. Oracle confirmed that it was part of a proposal made by TikTok’s parent ByteDance to the American government to become a technology partner for the Chinese firm.

ByteDance had been in talks to divest the US business of its hugely popular short-video app to Oracle or a consortium led by Microsoft Corp after US President Donald Trump ordered the sale last month and said he might otherwise shut it down.

China’s state-run English television channel CGTN had reported on Monday, citing sources, that ByteDance would not sell TikTok’s US operations to Oracle or Microsoft and would not give the source code for the video platform to any US buyers.

People familiar with the matter told Reuters that ByteDance abandoned the sale of TikTok in the US and decided to pursue a partnership with Oracle in hopes of avoiding a US ban while appeasing the Chinese government.

ByteDance declined to comment on CGTN’s report.

Oracle’s stock surged Monday after reports that ByteDance has chosen it to be TikTok’s US technology partner.

A person familiar with the discussions told CNBC that ByteDance picked Oracle to be the US partner of the popular social video app. Oracle also will take a significant stake in the business, the person said. Microsoft had earlier said ByteDance had chosen not to sell its TikTok’s US assets.

The sale of TikTok — forced by a Trump administration ban on grounds of national security — is one of the issues at the heart of the fraying Washington-Beijing relationship. Any deal still requires signoffs from both sides. Microsoft, which was working with Walmart had been seen as the likely winner but talks cooled in recent days, a person in the know said. 

Microsoft wasn’t asked to make revisions to its initial offer in the face of recent signs of opposition to a deal from Chinese government officials, the person added. 

It’s unclear whether a deal with Oracle would pass muster with the Trump administration, according to a person familiar with the discussions. But couching the deal as a corporate overhaul may help Beijing. 

It could allay fears about TikTok’s cache of sensitive US data while addressing Chinese concerns over the export of key artificial-intelligence technology, said Yik Chan Chin, who researches global media and communications policy at the Xi’an Jiaotong-Liverpool University in Suzhou.

Treasury Secretary Steven Mnuchin said earlier in the day that the Trump administration received a proposal from Oracle over the weekend to make Chinese-owned short video app TikTok a US-headquartered company and will review the plan this week.

YouTube to launch TikTok-like productYouTube is rolling out its version of social media rival TikTok, a new short-form video service called Shorts, enabled within its video-sharing platform.