Oracle enters race to buy TikTok’s US operations

By Monitoring Desk

San Francisco: Oracle has entered the race to acquire TikTok, the popular Chinese-owned short video app that President Donald Trump has vowed to shut down unless it is taken over by a US company by mid-November, people briefed about the matter have said.

The tech company co-founded by Larry Ellison had held preliminary talks with TikTok’s Chinese owner, ByteDance, and was seriously considering purchasing the app’s operations in the US, Canada, Australia and New Zealand, the people said.

Oracle was working with a group of US investors that already own a stake in ByteDance, including General Atlantic and Sequoia Capital, the people added.

Microsoft has been the lead contender to buy TikTok since it publicly said in early August that it had held discussions to explore a purchase of the app’s US, Canada, Australia and New Zealand businesses.

Microsoft has also seriously considered a bid to take over TikTok’s global operations beyond the countries it outlined this month, people briefed on the company’s thinking have said.

The Redmond, Washington-based company is particularly interested in buying TikTok in Europe and India, where the video app has been banned by Narendra Modi, Indian prime minister.

ByteDance is opposed to selling any assets beyond those in the US, Canada, Australia and New Zealand, said a person close to the company.

The entry of Oracle into the race provided ByteDance with a credible alternative to Microsoft’s offer, said one person with direct knowledge of the matter.

Twitter had also held early stage talks with TikTok, but there were serious concerns about the US social media group’s ability to finance the deal, said people briefed about the matter.

Oracle’s approach comes after Trump last week ordered ByteDance to divest TikTok’s US operations within 90 days, following a recommendation from the Committee on Foreign Investment in the US, a government panel that vets foreign transactions.

Trump’s order said the US had “credible evidence” that ByteDance was using TikTok, which reached 2bn downloads worldwide in 2020, to breach US security. ByteDance has repeatedly denied any allegations of improper data sharing. The US has been engaged in a trade war with China since Mr Trump took office.

Ellison, one of the world’s richest people, is one of the few people in Silicon Valley who has openly supported Trump.

In February, the 76-year-old billionaire entrepreneur held a fundraiser for the US president at his estate in Coachella Valley, California.

It is unclear whether the White House is more supportive of Oracle’s approach than that of Microsoft.

Any deal would face a long list of challenges, including separating the back-end technology of TikTok from ByteDance. It is also unclear how much TikTok’s US or global operations would fetch in a sale.

Oracle could not immediately be reached for comment. ByteDance, General Atlantic and Sequoia declined to comment.

Meanwhile TikTok has stepped up its defense against US accusations that the popular video app is a national security threat, denouncing what it called "rumors and misinformation" about its links to the Chinese government.

The video-snippet sharing service launched an online information hub on Monday after President Trump gave its Chinese parent firm a 90-day deadline to divest TikTok before the app is banned in the United States.

A previous executive order, prohibiting US entities from doing business with TikTok, will take effect 45 days after August 6.

On a web page titled "The Last Sunny Corner of the Internet," TikTok maintained it was setting the record straight about the platform.

"TikTok has never provided any US user data to the Chinese government, nor would it do so if asked," the company said in the post. "Any insinuation to the contrary is unfounded and blatantly false."

US user data is stored here, with a backup in Singapore, according to TikTok.

The company also launched a new @tiktok_comms Twitter account to address issues in real time.

As tensions soar between the world´s two biggest economies, Trump has claimed TikTok could be used by China to track the locations of federal employees, build dossiers on people for blackmail, and conduct corporate espionage.

The US leader early this month also ordered a ban on the messaging app WeChat, which is used extensively in China.

On Friday, Trump signed a separate executive order for ByteDance to sell its interest in Musical.ly, the app it bought and

merged with TikTok in 2017, citing national security.

TikTok said the US action "risks undermining global businesses´ trust in the United States´ commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth."

TikTok also repeated its intention to "pursue all remedies available to us in order to ensure that the rule of law is not discarded."

TikTok separately Monday announced an alliance with music distribution platform UnitedMasters, playing to budding artists and their fans despite US steps to bar the popular app.

The deal to integrate UnitedMasters into TikTok promised to build on a trend of the platform being a way for musicians to be discovered by posting short-clip videos. Financial terms of the deal were not disclosed.