Oracle confirms TikTok deal, says will serve as ‘trusted tech provider’

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Oracle logo. (File Photo: IANS)

 Cloud major Oracle on Monday confirmed a deal with ByteDance, the Chinese owner of short video-sharing platform TikTok which has been under pressure to divest its US operations for more than a month now.

The confirmation by Oracle comes a day after Microsoft, which was among the frontrunners to seal a deal for TikTok’s US operations, revealed that its bid was rejected by ByteDance.

“Oracle confirms Secretary (Steven) Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider,” Oracle said in a statement.

“Oracle has a 40-year track record providing secure, highly performant technology solutions,” it added.

Earlier in the day, US Treasury Secretary Mnuchin said that the US government received a proposal from Oracle related to the TikTok deal over the weekend and that the government plans to review the deal this week.

“I will just say from our standpoint, we’ll need to make sure that the code is, one, secure, Americans’ data is secure, that the phones are secure and we’ll be looking to have discussions with Oracle over the next few days with our technical teams,” Mnuchin told CNBC.

The Donald Trump administration had earlier raised concerns that the Chinese state could have access to TikTok user data.

Both China and TikTok denied the allegations. That, however, did not stop the Trump administration to put pressure on the short video-sharing platform to divest its US operations.

However, the negotiations got complicated after China updated its list of technologies that are subject to export ban. The new list includes technology used by ByteDance, leading the company to assure that it will adhere to export restrictions.

TikTok was banned in India in June, along with 58 other Chinese apps over national security concerns.

Amid reports of deal with Oracle for its US operations, TikTok on Monday said it has reached a new milestone of over 100 million monthly active users in Europe.

TikTok also revealed that it now has over 1,600 employees in Europe, working across a wide range of areas including brand and creator engagement, commercialisation, music, product, privacy, policy and safety.

“Against the backdrop of the extraordinary times we’re all living through, it’s also been a pretty extraordinary year for our business. We’ve been humbled to see how Europe has embraced TikTok during the time we’ve been here,” Rich Waterworth, General Manager, Europe – TikTok, said in a blog post on Monday.

“Today, more than 100m people across the region are active on TikTok every month,” Waterworth said.

The short video-sharing platform owned by Chinese unicorn ByteDance had already revealed about a month ago that it reached 100 million users in the US where it is facing threat of a ban unless it divests its operations in the country by September 20.

New details about ByteDance’s negotiations with US-based companies emerged on Sunday when Microsoft revealed that its bid for TikTok’s US operations were rejected.

Microsoft deploys data centre on sea floor to test energy efficiency
Microsoft. (File Photo: IANS)

Microsoft reportedly entered into the fray in partnership with Walmart.

Walmart in a separate statement said that it “continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties.”

“We know that any approved deal must satisfy all regulatory and national security concerns,” Walmart said.

The New York Times and other US media outlets reported that Bytedance has chosen Cloud major Oracle over Microsoft to run its US operations as a “trusted tech partner”.

According to the NYT, it was unclear whether TikTok’s choice of Oracle as a technology partner would mean that “Oracle would also take a majority ownership stake of the social media app”.

However, state-owned Chinese media reported that ByteDance will neither sell TikTok’s US operations to Oracle nor give the source code to any US buyer in that country.

Bytedance, the Chinese owner of TikTok, has chosen Cloud major Oracle over Microsoft to run its US operations as a ‘trusted tech partner’, multiple media reports revealed on Monday while an official announcement was still awaited.

According to The New York Times, it was unclear whether TikTok’s choice of Oracle as a technology partner would mean that “Oracle would also take a majority ownership stake of the social media app”.

This is different from an outright sale and appears to suggest Oracle will help run TikTok’s US operations with its Cloud technologies.

In an official statement, Microsoft said its bid for TikTok operations in the US was rejected.

“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 combating disinformation, and we made these principles clear in our August statement,” the tech giant added.

After TikTok was banned in India in June, along with 58 other Chinese apps, the Donald Trump administration in the US increased pressure on the ByteDance-owned platform to sell its US operations by mid-September or face a ban.

According to NYT, Oracle has cultivated close ties with the Trump administration.

“Its founder, Larry Ellison, hosted a fund-raiser for Trump this year, and its chief executive, Safra Catz, served on the president’s transition team and has frequently visited the White House”.

Trump said last month that he would support Oracle buying TikTok.

“I think that Oracle would be certainly somebody that could handle it,” he told reporters. Trump maintained there will be “no extension of the TikTok deadline”.

Riding on new customer wins in both Cloud applications and infrastructure businesses, Oracle posted better than expected results for its FY21 first quarter results last week, generating $9.4 billion in revenue which was up 2 per cent compared to the same period last year.

Meanwhile, China said the Trump administration’s deadline for TikTok sale is tantamount to “coercive robbery”.

“The tricks of economic bullying and political manipulation that the US played on non-American companies are tantamount to coercive robbery,” said a Chinese Foreign Ministry spokesperson over the weekend.

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