Microsoft defeated by Oracle in the race to acquire the popular video-sharing app TikTok in the US. A bid by Microsoft led Satya Nadella to acquire TikTok has been rejected. President of United States Donald Trump set a September 20 deadline for the sale of the US operations of TikTok. Donald Trump warned TikTok, if they don’t sell the US operation to a US-based company by September 20, the app would be banned in the United States. Microsoft is out of the race to buy the Chinese short video app TikTok. Microsoft said that TikTok’s parent company Byte Dance has rejected their bid to buy the company.
According to the reports, under the proposed deal, Oracle will be the technology partner of ByteDance and will manage TikTok’s US user data. New York Times reports, it is not yet clear whether the technology partnership will take a major stake in Oracle’s TikTok. Microsoft was leading the race alongside Walmart in acquiring TikTok until last month, as it is one of the strongest technology companies in the United States. Microsoft believed their proposal was good for American users of TikTok keeping in mind the security of the country, Microsoft said In a statement. ByteDance however refused to talk about the matter.
A controversial app
TikTok has exploded in popularity in the United States and other western countries, becoming the first Chinese social media platform to gain significant traction with users outside of its home country. It was downloaded 315 million times in the first three months of this year — more quarterly downloads than any other app in history, according to analytics company Sensor Tower.
But Trump and other US politicians have said the app poses a threat to national security because it could be used as a spying tool by Beijing. Authorities have also expressed concern that it could be used to collect personal data on US citizens or censor speech deemed to be sensitive by the Chinese government.
TikTok has denied those allegations. The company has said its data centers are located entirely outside of China and that none of that data is subject to Chinese law.
The agreement with Oracle comes days before a ban on TikTok in the United States was scheduled to go into effect. After September 20, the Commerce Department is expected to clarify which types of business dealings involving TikTok will be prohibited in the country, according to an executive order Trump signed August 6.
It’s not clear whether TikTok’s partnership with Oracle would allow the short-form video app to avert that ban. The scope and language of the order, along with Trump’s own remarks about TikTok, have led to confusion about how a ban would be implemented. In another executive order, Trump said TikTok had until November 12 to find a buyer.
Separately, a TikTok employee has challenged the looming ban in federal court and is seeking a judicial decision to suspend the August 6 executive order. A hearing to consider the plea is scheduled for Tuesday. TikTok has also sued the Trump administration over one of the orders, calling it “heavily politicized.”
Oracle’s victory and a blow to Microsoft and Walmart
Microsoft had had an eye on TikTok for weeks. Numerous analysts had interpreted Microsoft’s pursuit of TikTok as a potential opportunity to scoop up one of the world’s fastest-growing social media platforms in a situation where TikTok may be desperate to make a deal and Microsoft could grab the deal at a cheaper rate.
Walmart earlier had shown interest to join hands with Microsoft in this acquisition. Walmart on Sunday said that it was interested in investing in TikTok and that it was in talks with ByteDance and other parties.
“We were confident our proposal would have been good for TikTok’s users while protecting national security interests. It would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation.
Sources said on Sunday that the company owned by TikTok has chosen the oracle instead of Microsoft for the deal. With this deal, this popular app in the US can remain in the trend. Microsoft said on Sunday that ByteDance, a Chinese company that owns TikTok, has informed it that its bid for the acquisition has been rejected. Microsoft said we are confident that our offer is good for users of TikTok. At the same time, we would also protect national security interests.