Oracle wins bidding war for TikTok’s US operations

A month of uncertainty surrounding TikTok’s future in the US has reportedly ended, with tech consortium Oracle winning the race to head up all Western operations.

Trump has made no secret of his disdain for TikTok since ByteDance’s acquisition of Musical.ly in 2017, but a deal has been reportedly been struck to ensure the platform maintains its major presence in the US for years to come.

Right when it appeared TikTok was on course for a nationwide ousting in the States, with the President giving ByteDance until September 15th to find a trusted buyer to run operations in the US, Australia, Canada, and New Zealand, tech consortium Oracle arrived on the eve of the executive order to strike a deal.

Microsoft had previously been the clear favourites in the bidding war, boasting the hefty financial weight and world class security infrastructure that’s needed for an app as big as TikTok. However, it appears ByteDance is now digging its feet in and is refusing to sell or transfer TikTok’s proprietary algorithm in any divestment. Microsoft withdrew all interest on Sunday and it seems the Beijing-based giant is now keen to take up Oracle on a unique proposition.

According to The Wall Street Journal, Oracle has been identified as a ‘trusted tech partner’ in negotiations and not a direct owner per se. This means that though there will no outright sale, Oracle will help to run US operations with its own cloud technologies instead of amending TikTok’s programming at source.

Having already partnered with Zoom earlier in the pandemic, this really cements Oracle’s desire to become a major client in 2020 by offering its services to giant companies in exchange for a minority stake.

As it stands, the partnership isn’t official just yet. Geopolitical tensions between China and America are still pretty frayed, with the Chinese government taking exception to the pressure put on its digital exports by the White House. Just two weeks ago, its national trade rules were updated to block the national transfer of AI technologies – such as those used to personalise TikTok’s individual user feeds – going forward.

Whether or not Trump is willing to accept a partnership over a sale to an American buyer is another matter entirely. Rest assured though, ByteDance’s move is a shrewd one. Oracle is a rare ally of the Trump administration in Silicon Valley and has a history of collaborating with the US government; most recently holding a fundraiser for Trump’s re-election campaign in February.

An investment tie might just be enough to bind Oracle’s cloud services to TikTok in the States, but a lack of complete transparency with TikTok’s processes will do little to reposition the brand’s PR as it aims to shake troublesome claims of hidden Chinese surveillance.

Either way, with 100 million plus monthly active users last month I reckon it’s safe to assume that your average American probably isn’t too concerned with all that.

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