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TikTok and Oracle have entered into a “technology partnership” so that the popular video application, with around 800 million active users worldwide, remains in place in the United States.
A Oracle confirmed that it is part of a proposal submitted by the Chinese ByteDance, developer of the application, to the US Treasury. The agency must approve the deal.
The US company will be a “trusted technology provider” and is expected to take over the management of application user data in the US.
The companies sewed a deal instead of a direct sale, which was expected since the president of the United States, Donald Trump, threatened to ban the service if it did not sell in mid-September.
US officials expressed concern that information about users of the platform could be transmitted to China, and Trump began pushing for the sale of the application.
A Oracle is a company focused on the corporate market, which offers cloud platform solutions. Database management is one of the company’s specialties.
The company is also negotiating a stake in the app’s US operations, sources told Reuters.
US Treasury Secretary Steven Mnuchin told CNBC on Monday that he was having “discussions with Oracle and its technical team for the next few days.”
“Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend that Oracle will act as a trusted technology provider,” said a statement.
The CFIUS (Committee on Foreign Investment in the United States) is expected to conduct this review this week and send a recommendation to President Donald Trump, who will make a decision.
“We have a lot of confidence in both Microsoft and Oracle, they chose Oracle, we will have a review with their technical teams and our technical teams,” Mnuchin told CNBC.
The secretary said the deadline for the deal, following Trump’s executive order, is Sept. 20.
TikTok: the Chinese application that has gained millions of users
Commercial history
TikTok is known for its short videos popular with teens. Went to first Chinese social network to gain popularity in markets such as the United States, Europe and Brazil.
On Monday (14), the application announced that it reached 100 million monthly active users in the United States alone. The mark was achieved less than a month after reaching the same number of active users in Europe.
The popularity of TikTok caught the attention of US officials, who expressed concern that information about the platform’s users could be transmitted to China.
The app said it would not comply with any requests to share user data with the Chinese authorities.
In August, Trump issued an executive order prohibiting “any transaction made by any person, or in relation to any property, subject to the jurisdiction of the United States” with ByteDance, the app’s developer.
The President of the USA threatened to ban the app if it wasn’t sold to a US company in mid-September.
Last Thursday (10) Trump spoke on a different date for the conclusion of the agreement or the prohibition of the application in the United States, citing September 15. However, the day did not coincide with the orders issued by the US government.
In a separate decision issued on August 14 by the CFIUS (Committee on Foreign Investment in the United States), the sale of the US operation of TikTok was ordered in 90 days. The deadline is mid-November.
Microsoft emerged as one of the main stakeholders in TikTok. In early August, the company confirmed that it was talking about acquiring the app’s operations in the United States, Canada, Australia, and New Zealand.
Last Sunday (13) Microsoft confirmed the rejection of the ByteDance offer.
The talks ended after days of news suggesting that the Chinese government would rather have TikTok shut down its US operations than have a forced sale of operations.
Chinese officials estimated that a forced sale would make ByteDance and China appear weak under pressure from Washington, the sources said.
China announced a law in late August that restricted the sale of technologies, including algorithms. The TikTok algorithm was considered one of the most attractive assets for the acquisition of the application.
In the agreement made with Oracle, this part of the application would remain in the hands of the developer ByteDance.
