15 September 2020
Update: September 14, 2020
Soon after the news broke that ByteDance has denied selling TikTok's US operations to Microsoft, a new name took the place in the limelight and it was Oracle. A report from Reuters said that ByteDance has chosen Oracle as its technology partner and Oracle is also looking at closing an acquisition deal with ByteDance.
But according to China's State broadcaster CGTN citing sources, ByteDance is not even selling the operations to Oracle.
CGTN has learned from sources that ByteDance will also not sell TikTok's U.S. operations to Oracle.
ByteDance has, however, denied to comment.
Original Post (September 14, 2020)
Several reports on Microsoft acquiring TikTok’s US operations made enough rounds on the internet in recent times. These reports became more concrete when Microsoft itself confirmed acquisition plans. But unfortunately, this deal failed to happen between the two companies.
A report from South China Morning Post now states that ByteDance has decided not to sell or transfer code behind its popular video-sharing app to Microsoft. The source familiar with the matter has reportedly informed the publication and said, “the car can be sold, but not the engine.” According to the report, ByteDance has even notified US authorities and potential bidders of the decision.
As the report points out, the exclusion of the algorithm would also force potential buyers to reconsider their purchase plans and valuations.
Soon after this report from China, Microsoft issued a statement via its official blog as well. Microsoft conveys that ByteDance had told them that they would not be selling TikTok’s US operations to Microsoft. The company further said that to protect national security, it would have made significant changes. Microsoft emphasizes that its proposal was not only good for the US but also for TikTok’s users.
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.
ByteDance has already been given an extension by President Trump to sell or spin-off TikTok’s US operations. According to the executive order issued by Trump, ByteDance doesn’t have much time remaining and it either needs to come to a decision or just leave its US operations forever.
Referring to its ongoing situation and all the dwindling deals, TikTok had already filed a lawsuit against the US government over the order.
Note that a potential deal between ByteDance and any US company became uncertain after Beijing announced new rules governing technology exports. One of the newly added restrictions includes the government permission that the companies must obtain for the export of certain technologies.
Now, according to Reuters, ByteDance has selected Oracle as its technology partner where the latter will be responsible for handling the former’s US user data. The same report mentions that Oracle is also negotiating to take a stake in TikTok’s US operations. The report points out that it is, however, unclear whether Trump would allow this deal to happen. Reportedly, The Committee on Foreign Investment in the United States (CFIUS), a U.S. government panel which reviews deals for national security risks, is overseeing the ByteDance-Oracle talks.