Oracle outbids Microsoft for TikTok U.S. – but there’s a catch

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Microsoft has lost the deal to acquire TikTok from Oracle. The only problem still ahead is that the deal now faces review by Donald Trump’s White House.

Oracle has reportedly won its bidding war against Microsoft for the U.S. operations of TikTok, but there is a fly in the ointment: the deal may not actually include the sale of the popular short-video app.

A person familiar with the deal told the Wall Street Journal that Oracle is set to be designated as TikTok’s “trusted tech partner” in the United States. However, the deal will not include an outright sale of TikTok U.S. operations by the parent company ByteDance.

The deal finds itself in limbo, with some speculating that Oracle might use its technology to run or help run TikTok in the U.S., while ByteDance maintains some or all of the U.S. ownership rights to the platform itself.

Tick Tock …

The unclear structure of the deal only worsens the time pressure that TikTok face in the U.S. market due to an Executive Order signed by President Trump on August 6. The EO forbids all U.S. transactions with ByteDance and gave the company until September 20, to divest TikTok in the U.S. A follow-up Executive Order appeared to give ByteDance an extended period of 90 days, or until November 12. But a subsequent statement issued on September 14th by Commerce Secretary Wilbur Ross confirmed that they are still adhering to the September 20 deadline for the sale.

Oracle’s Friends in High Places

Whatever form Oracle’s deal with TikTok deal may take, it is very likely to be approved by the White House. Oracle is one of the few “Big Tech” allies that the Trump team have in Silicon Valley. Co-founder and Chief Technology Officer Larry Ellison is one of the very few Trump supporters among the tech elite. Oracle Chief Executive Officer Safra Catz served on the Trump transition team. Trump himself endorsed Oracle’s bid for TikTok August 18.

The news that Oracle may have a deal with TikTok came on September 13. Microsoft had issued a statement earlier in the day saying that it would not be acquiring TikTok US.

Also read: Oracle: stop, think and acquire something other than TikTok