What just happened? Microsoft has confirmed that it will not be acquiring TikTok’s US operations. According to reports, owner ByteDance won’t be selling the source code for its video-sharing app to any American firms but will instead seek a partnership with Oracle in the hope of satisfying the Trump administration's demands.
Despite its massive popularity, TikTok has long come under scrutiny for its alleged privacy issues. It’s been banned by numerous US government agencies and political campaigns, while also being blasted by some within the tech industry.
In August, Donald Trump signed a pair of executive orders that prohibit any US transactions with ByteDance, leaving it with little option but to sell TikTok's US operations. Microsoft had appeared favorite in the race, possibly through a partnership with Walmart, but the Redmond firm has been knocked back.
“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests” Microsoft said.
“To do this, 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.”
According to The Washington Post and Reuters, ByteDance is now pursuing a partnership with Oracle—another firm that was vying to buy TikTok. The details of any potential partnership are unclear, but not handing over the source code should appease the Chinese government, which reportedly would rather see TikTok banned in America than sold to a US firm, while satisfying the Trump administration's demands.
Will Larry Ellison's admiration of Trump help TikTok's plan?
The deal could also see some of ByteDance’s biggest backers gain minority stakes in TikTok’s US operations, according to sources.
The plan all depends on whether Trump gives it the go-ahead. One advantage Oracle may have is its chairman, Larry Ellison, who was one of the few big tech names to support the president publicly.
TikTok is heading to court to challenge Trump’s ban, which comes into effect on November 12 following an extension. A hearing is scheduled for tomorrow. The company is also suing the administration over the order.
Center image credit: drserg