TikTok will not be selling its US operations. Instead, the Chinese-owned platform has chosen Oracle as its new “Trusted Technology Partner.”
Will Trump accept the new terms? If not, ByteDance, TikTok’s owner, says it’s ready to pull the app out of the US.
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Trump wanted a sale, he might have to settle for less. On Sunday night, TikTok announced it chose Oracle to take control of its US operations, putting an end to weeks of speculations. The company also explained it opted for a “technology partnership” with Oracle over Microsoft who intended to isolate TikTok’s US operations from the company’s business in Europe and Asia.
Mnuchin on CNBC confirms Oracle has made a proposal to be Tik Tok's "trusted technology partner" to create a US headquartered company with 25,000 new jobs. CFIUS will review the proposal this week and make a recommendation to Trump.
— Alan Rappeport (@arappeport) September 14, 2020
Microsoft shared its disappointment and concerns around the Oracle deal:
“We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting misinformation,” Microsoft said in a statement. “We look forward to seeing how the service evolves in these important areas.”
Details of the deal remain to be shared. However, with Oracle being referred to as a “trusted technology partner,” it is clear that TikTok wants everyone to know the agreement is not to be considered a sale. TikTok’s Chinese parent company ByteDance will retain control of the algorithm, while Oracle will host cloud storage in the US. Which, in itself, does not seem to solve any of the security concerns that first pointed Trump to call for a TikTok ban.
“A deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok, and the White House accepting such a deal would demonstrate that this exercise was pure grift,” former Facebook security chief Alex Stamos stated on Twitter.
https://twitter.com/alexstamos/status/1305290677241085954
The deal between TikTok and Oracle will be presented to Trump later this week, as the two companies have until September 20 to resolve the national security concerns.