Microsoft announced on Sunday that its offer for TikTok was rejected, removing the tech giant a week before President Donald Trump vows to go ahead with a plan to ban the Chinese-owned app in the US over espionage concerns. .
TikTok declined to comment on Sunday. Oracle did not respond to a request for comment, but previously declined to comment.
the Trump administration He threatened to ban TikTok before September 20 and ordered ByteDance to sell his US business, citing national security risks due to its Chinese ownership. The government is concerned that user data is being funneled to the Chinese authorities. TikTok denies it is a national security risk and is suing to stop the administration from the threatened ban.
It is unclear if the proposed acquisition will only cover TikTok’s business in the United States, and if so, how it will be divided from the rest of the TikTok social media platform, which is popular around the world. Bytedance also has a second application, Douyin, for the Chinese market.
Any agreement must still be reviewed by the Committee on Foreign Investment in the United States, known as CFIUS, a group of the United States government chaired by the Secretary of the Treasury that studies mergers for national security reasons. The president can approve or disapprove a transaction recommended by the panel, although Trump has already voiced his support for Oracle as a “big company” that could handle the acquisition.
Microsoft said in a statement Sunday that Bytedance “let us know today that they will not sell TikTok’s US operations to Microsoft.”
Microsoft added that it was “confident that our proposal would have been good for TikTok users, while also protecting national security interests.” The company said it “would have made significant changes to ensure that the service meets the highest standards of security, privacy, online security and fighting disinformation.”
TikTok, which says it has 100 million users in the US and around 700 million worldwide, is known for its funny and silly dance, lip-sync, prank and prank videos. It has recently become home to more political content, such as comedian Sarah Cooper, who drew a large audience by lip-syncing to Trump’s often disjointed statements in public appearances.
But the app has also raised concerns due to its Chinese ownership. The White House has cracked down on a variety of Chinese companies, including telecommunications equipment makers Huawei and ZTE and the messaging app WeChat, over concerns that they would allow Chinese authorities to obtain data from American users. Republican and Democratic lawmakers have raised concerns about censorship and children’s privacy.
TikTok denies that it has shared user data with the Chinese government or that it would do so if asked. The company says it has not censored videos at the request of the Chinese authorities and insists it is not a threat to national security.
TikTok has filed a lawsuit to stop the ban, but not the sell order. The negotiations have been complicated by several factors, including repeated demands by Trump that the US government should get a “cut” from any deal, a stipulation and a role for the president that experts say is unprecedented.
Also, in late August, the Chinese government released new regulations restricting technology exports, likely to include the artificial intelligence system TikTok uses to choose which videos to send to its users. That means ByteDance would have to obtain a license from China to export such technology to a foreign company.
The deal was quickly finalized after the administration stepped up its threats against TikTok this summer, despite TikTok’s efforts to put distance between its app and its Chinese ownership. It installed former Disney executive Kevin Mayer as its US CEO, but resigned in August after only a few months on the job, saying “the political environment has changed dramatically.”
Both Microsoft and Oracle are better known for their business software offerings than for those aimed at consumers.
Oracle primarily manufactures database software. It competes with tech giants like Microsoft and Amazon that provide cloud services, as well as business software specialists like Salesforce.
Some analysts view Oracle’s interest in a consumer business as wrong. Oracle should focus on acquisitions in the enterprise market and not invest in a consumer app like TikTok that doesn’t fit in with the rest of its business, said Jefferies analyst Brent Thill, who likens the idea to buying a motorcycle company for Delta Airlines. “It doesn’t make any sense,” he said.
Thill suggested that TikTok competitors such as Facebook and Snapchat should “encourage Oracle” as a buyer, because Oracle would not “add much value to the application.”
Oracle co-founder Larry Ellison is unusual among tech executives for his public support of President Donald Trump, hosting a fundraiser for him in February at his Rancho Mirage, California, estate. The company also hired a former assistant to Vice President Mike Pence; Its CEO, Safra Catz, was also part of Trump’s transition team.
The president said on August 18 that Oracle was “a great company” that “could handle” the purchase of TikTok. It declined to state its preference between Oracle and Microsoft as buyers.
On video: TikTok rejects Microsoft, chooses a forced sale offer by Trump: Sources
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