TikTok: Oracle Confirms Bytedance Chosen As App Partner

US tech company Oracle has confirmed that the owner of TikTok has formally proposed that it become a “trusted technology partner” for the video sharing app.

Full details of the alliance have yet to be revealed, but the goal is to avoid President Trump’s threat to shut down the Chinese-owned service in the United States.

Trump has cited national security concerns, suggesting that Beijing could access user data under current agreements.

The current owner Bytedance denies it.

Oracle is a database specialist with no experience running a social media application aimed at the general public.

Hours earlier, US Treasury Secretary Steven Mnuchin said the US company had contacted the Trump administration to discuss plans to turn TikTok into a US-based company. He said the White House intended to review the idea this week.

Bytedance has yet to comment on the latest development.

Shares of Oracle were trading 7% higher in New York mid-morning.

“While I can see the benefits of Oracle from a cloud perspective, it’s hard not to think about how much of this deal is based on politics rather than technology,” said Carolina Milanesi of research firm Creative Strategies, based in Silicon Valley.

Oracle chairman, billionaire Larry Ellison, is a Trump supporter and held a fundraiser at his California home in February to help the Republican leader’s re-election campaign.

The White House is also taking a hard line against other Chinese tech companies, including Huawei, Tencent, and several AI startups, restricting the business they can do with their American counterparts without approval from the administration.

President Trump had given TikTok owner Bytedance until this week to secure a deal.

Failure to do so would have prevented US companies from doing business with him since Sunday, and Bytedance would have been forced to abandon TikTok’s operations in the US one way or another before November 12.

Oracle was not the favorite to buy or link with the US branch of TikTok – Microsoft was the pioneer in the early stages.

But as time went on, Microsoft became more and more concerned about what it was acquiring.

It became clear that China could try to block the sale of the technology behind the app’s powerful algorithm.

Privately, there were also concerns that Microsoft was about to create a bar for its own back by engaging in a youth-focused mass-market social network – it already owns LinkedIn, but it caters to a very different audience.

Political bias, child safety issues, and right-wing militias are just some of the issues TikTok has had to grapple with in recent months.

Still, TikTok’s hundreds of millions of users make it an attractive proposition in an industry where size is everything – if all your friends are on one platform, you’re more likely to join too.

Oracle has decided that the risk is worth taking.

The big questions now are what exactly is Oracle’s stake and whether the alliance will be approved by the US and Chinese authorities.

March 2012: Bytedance Establishes in China and Launches Neihan Duanzi, an App to Help Chinese Users Share Memes

September 2016: Bytedance launches Douyin short-form video app in China

August 2017: An international version of Douyin is released under the TikTok brand in some parts of the world, but not the US at this time.

November 2017: Bytedance buys the Musical.ly lip sync music app

May 2018: TikTok declared the iOS app not the world’s most downloaded game during the first three months of the year, by market research firm Sensor Tower

August 2018: Bytedance Announces It Will Close Musical.ly And Move Users To TikTok

February 2019: TikTok fined in the US for Musical.ly’s handling of data of children under 13 years of age

October 2019: Facebook’s Mark Zuckerberg Publicly Criticizes TikTok, Accusing It Of Censoring Protests

November 2019: Committee on Foreign Investment in the United States (Cfius) opens national security investigation into TikTok

May 2020: TikTok Hires Disney Executive Kevin Meyer to Become Bytedance’s Chief Executive Officer and COO

June 2020: India bans TikTok among dozens of other Chinese apps

July 2020: US Secretary of State Mike Pompeo and later President Trump say TikTok could be banned

August 2020: Microsoft and Oracle make rival approaches to acquire or operate TikTok in the US and three other markets. Meyer announces that he is leaving the company because “the political environment has changed dramatically”

September 2020: TikTok says it has more than 100 million active users in Europe. He recently said that he had a similar number in the US and is estimated to have more than 800 million committed members worldwide.