TikTok Owners Choose Oracle Over Microsoft as US Technology Partner – NBC4 Washington

Oracle announced on Monday that TikTok’s Chinese owner has selected a U.S. company as a “trustworthy technology provider”, a rival in a deal that could help keep its popular video-sharing app running in the U.S. Defeated Microsoft.

Oracle spokesman Deborah Herringer confirmed that U.S. Treasury Secretary Steven Mnuchin told CNBC on Monday that TikTok’s parent company, ByteDance, had submitted the proposal to the U.S. government for approval. Said that.

“We received a proposal over the weekend that included Oracle as a credible technical partner with Oracle, which makes many statements on national security issues,” said Mnuchin.

Mr Mnuchin said he also has a commitment to turn TikTok’s global business into a US-based company with 20,000 new jobs.

President Donald Trump’s administration threatened to ban TikTok by September 20, ordered owner ByteDance to sell its US operations, and claimed national security risks from Chinese ownership. The government is concerned that user data will be sent to Chinese authorities. TikTok has denied that it is a national security risk and has urged the government to prevent the government from enacting threatened bans.

Much remains unclear about the proposed deal with Oracle, which does not refer to it as a sale or acquisition.

Any transaction must continue to be considered by the Committee on Foreign Investment in the United States, known as CFIUS, a US government group chaired by the Treasury Secretary studying mergers for national security reasons. Mr Mnuchin said he hopes the group will consider the proposal this week and recommend it to the president later.

Mr. Trump has already expressed support for Oracle as a “great company” that can handle the acquisition, but the president can approve or reject the deal recommended by the panel.

“Please let us know today that we will not sell TikTok’s US business to Microsoft,” Microsoft said in a statement on Sunday.

The proposal to acquire TikTok’s US business has raised questions among external observers as to how it will be split from other TikTok social media platforms that are popular around the world. ByteDance also owns a similar video app, Douyin, for the Chinese market.

The TikTok community of over 100 million users is worried about what happens to popular apps after Trump announces a pending ban and interest from Microsoft on the possibility of buying TikTok in the United States. waiting.

“We are confident that our proposal was beneficial to TikTok users, while protecting national security interests,” Microsoft added. “We would have made significant changes to ensure that our services meet the highest standards of security, privacy, online security and the fight against disinformation,” the company said.

Wal-Mart, which was planning to partner with Microsoft for the acquisition, said on Sunday that it “is still interested in investing in TikTok,” in talks with ByteDance and other stakeholders.

TikTok says it has 100 million users in the US and about 700 million worldwide and is known for its funny and goofy videos of dance, lip sync, pranks and jokes. These days, it has become home to more political content, such as comedian Sara Cooper. Sara Cooper captivated a large audience by lip-synching Trump’s often disjointed remarks from the public.

However, the app also raises concerns due to Chinese ownership. The White House is worried that it will crack down on various Chinese companies such as telecommunications equipment makers Huawei and ZTE and the messaging app WeChat, giving Chinese authorities access to US user data. Republican and Democratic lawmakers have expressed concern about censorship and child privacy.

TikTok denies sharing user data with the Chinese government or when requested. The company said it had not censored the video at the request of Chinese authorities, claiming it was not a national security threat.

TikTok has appealed to suspend the ban, but the sales order has not. Negotiations are complicated by several factors, including Trump’s recurring demands that the U.S. government need to obtain “cuts” in every transaction, and the president’s rules and roles that experts say is unprecedented. I will.

In addition, the Chinese government announced new regulations in late August to limit the export of technology. This could include an artificial intelligence system that TikTok uses to select videos to spool to the user. That is, ByteDance needs to obtain a license from China to export such technology to foreign companies.

“The Chinese government has suggested that it could block the export of TikTok’s AI system, which could complicate direct sales,” said Tiffany Lee, a visiting professor at Boston University School of Law. There is. “

Home to viral dance videos and controversial, TikTok is exploding in popularity despite security and user privacy concerns. U.S. officials and companies have expressed privacy and security concerns about apps owned by China, and many companies are asking employees to remove apps from their mobile phones.

She said TikTok’s AI-powered video recommendation system is one of the competitive advantages of the app.

Whether trading with Oracle-TikTok can circumvent China’s export restrictions depends on the entity holding control of TikTok in the United States, says Paul Haswell, a partner at Hong Kong-based law firm Pinsent Masons. Says.

Despite TikTok’s efforts to distance the app from Chinese ownership, the deal closed rapidly this summer after the administration increased its threat to TikTok. Former Disney executive Kevin A. Mayer was appointed CEO of the United States, but he resigned in August, saying “the political environment has changed dramatically” after just a few months of employment.

Both Microsoft and Oracle are better known for their business software products than those for consumers.

Oracle primarily creates database software. It competes with leading technology companies such as Microsoft and Amazon that provide cloud services, and business software specialists such as Salesforce.

Some analysts see Oracle’s interest in consumer business in the wrong direction. Oracle should focus on acquisitions in the enterprise market and not invest in consumer apps like TikTok that don’t fit into other businesses, Jeffreys analyst Brent Chill said. It was. “It doesn’t make sense,” he said.

Thill suggested that TikTok competitors such as Facebook and Snapchat should “support Oracle” as a buyer because Oracle doesn’t “add a lot of value to the app.”

Oracle co-founder Larry Ellison is unusual among technical executives for hosting a fundraising campaign for him at Rancho Mirage, California in February and publicly supporting Trump. The company also hired a former top aide to Vice President Mike Pence. Its CEO, Safra Catz, also joined Trump’s migration team.

The president said on August 18 that Oracle is a “great company” that can “handle” TikTok purchases. As a buyer, he declined to state his preferences between Oracle and Microsoft.

“We have great confidence in both Microsoft and Oracle,” Mnuchin said on Monday. “They chose Oracle.”

Hong Kong AP Technology Writer Zen Soo contributed to this report.

TikTok Owners Choose Oracle Over Microsoft as US Technology Partner – NBC4 Washington

Source link TikTok Owners Choose Oracle Over Microsoft as US Technology Partner – NBC4 Washington

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