TikTok has found a dance partner to keep it going in the US — but it has to convince the feds not to let the deal flop. American software firm Oracle said it would become the “trusted technology provider” for ByteDance — the Chinese tech giant behind the popular app known for its viral dance …
TikTok has found a dance partner to keep it going in the US — but it has to convince the feds not to let the deal flop.
American software firm Oracle said it would become the “trusted technology provider” for ByteDance — the Chinese tech giant behind the popular app known for its viral dance videos — in a deal meant to assuage the Trump administration’s fears that Beijing could get ahold of its user data.
Neither TikTok nor Oracle disclosed substantive details of the deal announced Monday, but it will reportedly stop short of the full sale President Trump ordered last month.
Oracle is expected to manage TikTok’s American user data and take a stake in its US operations without becoming the outright owner, according to news reports.The deal also calls for the creation of a new US-based company called “TikTok Global” with 20,000 new jobs, Treasury Secretary Steven Mnuchin said, adding that the feds will review the proposal this week.
“They’ve chosen Oracle, we’ll be reviewing it with their technical teams and our technical teams to see if they can make the representations that we need,” Mnuchin told CNBC on Monday, a day after Microsoft revealed ByteDance had rejected its bid for TikTok.
Mnuchin said the feds have “a lot of confidence” in Oracle and that the company had made “many representations” that it would address the national security issues at play. Those include concerns that Americans’ user data could be shared with the Chinese government, allegations TikTok has denied
Trump himself expressed support for Oracle’s bid last month, calling it a “great company” that “could handle it.” Oracle co-founder and chairman Larry Ellison hosted a Trump campaign fundraiser at his California estate in February, and CEO Safra Catz reportedly worked on the president’s White House transition team.
“This proposal would enable us to continue supporting our community of 100 million people in the US who love TikTok for connection and entertainment, as well as the hundreds of thousands of small business owners and creators who rely upon TikTok to grow their livelihoods and build meaningful careers,” TikTok said in a statement.
Monday’s announcement was the latest chapter in a geopolitical drama that started in August, when Trump issued an order that would have effectively banned TikTok out of US app stores on Sept. 20.
Trump followed that up with another order giving ByteDance until Nov. 12 to divest TikTok’s US operations under the supervision of the Committee on Foreign Investment in the United States, a panel that reviews foreign business deals in the US. Mnuchin said the committee, known as CFIUS, will now review the proposed Oracle deal and make a recommendation to Trump.
The panel has plenty of latitude to approve the proposal even though it appears inconsistent with Trump’s unambiguous order, according to Shannon Reaves, special counsel in the national security practice at the Stroock law firm.
“There’s a lot of room there for CFIUS discretion to review what has been proposed and to determine whether or not it meets the requirement and purposes of the order,” Reaves — who specializes in CFIUS cases but is not involved with the TikTok matter — told The Post.
However, he added, “CFIUS would have to have full confidence that the data it’s concerned about would not make its way back to ByteDance.”
While Oracle beat out deep-pocketed tech giant Microsoft, it will likely cross the finish line without the app’s secret sauce: the algorithm that keeps users hooked by feeding them videos based on their preferences.
The Chinese government imposed new restrictions on technology exports last month that likely would have required ByteDance to get a license to hand the algorithm to an American company. Those rules made a full acquisition of TikTok less attractive for its American suitors, meaning the feds are likely to approve the Oracle deal that’s before them, according to Wedbush Securities analyst Daniel Ives.
“Buying TikTok without the algorithm is like having pizza without cheese,” Ives told The Post. “I think once Beijing essentially put the poison pill in the deal, the White House recognized a sale was not going to happen, because Microsoft’s not going to acquire it, or Oracle, without the algorithm.”