According to sources familiar with the matter at hand, TikTok’s owner, ByteDance has abandoned the sale of TikTok in the U.S. and is instead pursuing a partnership with Oracle Corp in the hope of avoiding a ban and at the same time appease the Chinese government.
The development comes in the wake of U.S. officials expressing concerns that TikTok’s short videos harvests data on U.S. consumers which could be passed on to China’s communist regime.
To further complicate matters, China amended its export control rules late last month allowing it to have a say over the transfer of TikTok’s algorithm to a foreign buyer. The Chinese government would prefer a total shutdown of TikTok’s U.S. operations rather than a forced sale.
Under a proposed deal, Oracle as ByteDance’s technology partner will assume management of TikTok’s U.S. user data, said sources. Oracle is also negotiating buying a stake in TikTok’s U.S. operations.
According to sources, some of ByteDance’s top backers, including General Atlantic and Sequoia, will be given minority stakes in TikTok’s U.S. operations under the proposed deal. It is to be seen whether Trump will approve such a proposal.
Incidentally, the Committee on Foreign Investment in the United States (CFIUS) is overseeing the negotiations between ByteDance and Oracle.
Neither ByteDance nor Oracle immediately responded to requests for comment.
The White House declined to comment.
Oracle has technological capability in handling data, but has no experience in social media.
More than 40% of Americans back Trump’s move to ban TikTok in the United States if it does not manage to get a U.S. buyer, according to an Ipsos national poll last month.