Oracle (ORCL 0.19%) is apparently the winner of the race to acquire the U.S. operations of Chinese video-sharing app TikTok after Microsoft (MSFT -0.04%) announced its bid had been rejected by ByteDance.
Walmart (WMT 0.43%), which had agreed to partner with Microsoft in its bid, is now reportedly considering joining with Oracle. The Wall Street Journal reports the deal is not likely to be an outright sale. Instead, it positions Oracle as the social media company's "trusted tech partner" in the U.S.
Pressured to sell
The U.S. government is concerned about ByteDance's collection of personal user data and its relationship with the Chinese government, fearing the company could use the data it acquires for blackmail, corporate espionage, or to track government employees. TikTok has around 100 million monthly users in the U.S.
Although ByteDance denies any relationship with Beijing, President Trump gave the tech company until Sept. 20 to arrange a sale to a U.S. company or face having its U.S. operations shut down. Other countries, including Japan, Pakistan, and Australia, are also mulling restrictions on the app. India has already banned it.
The Wall Street Journal notes that the Oracle deal may not include the transfer of any significant assets nor TikTok's core algorithm, which is used to determine which videos it offers to which users.
Beijing opposes an outright sale of the company's U.S. operations, and reportedly would rather see TikTok shut down in this country. The Chinese government recently issued new regulations that could restrict or even ban the export of certain technology without prior governmental approval.
Oracle was not an obvious choice to link up with ByteDance in this way. It's mostly a commercial-oriented operation, in contrast to Microsoft, which has substantial consumer-facing businesses. Given that, Oracle might especially welcome Walmart's participation in its new partnership.
Whether Trump will actually accept the agreement ByteDance is offering instead of an outright sale is unknown, but the deal still would need approval from the Committee on Foreign Investment in the U.S.