Oracle beats Microsoft in race for TikTok’s operations in US
The firm may take a stake in the newly configured biz and serve as the video app’s US tech partner
Oracle Corp. edged out rival Microsoft Corp. in negotiations for the US operations of TikTok, people familiar with the talks said, as the Chinese-owned music-video app attempts to avoid getting shut down in a clash between the world’s two superpowers.
A deal between TikTok owner ByteDance Ltd and Oracle will look more like a corporate restructuring than the outright sale Microsoft had proposed, though it is likely to include a stake in a newly configured American business, said one of the people, who asked not to be identified because the information isn’t public.
The terms being discussed with Oracle are still evolving, one of the people said. One of the options being explored is that Oracle could take a stake in a newly formed US business while serving as TikTok’s US technology partner and housing the video app’s data in Oracle’s cloud servers. Early offers from both parties valued the US business at about $25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, said people with knowledge of the matter.
shares traded as much as 17% higher in early trading before markets opened in New York on Monday, after closing at $57 on Friday.
The sale of TikTok—forced by a Trump administration ban on grounds of national security—is one of the issues at the heart of the fraying Washington-Beijing relationship.
Any deal still requires signoffs from both sides. Microsoft, which was working with Walmart Inc., had been seen as the likely winner but talks cooled in recent days, one person said. Microsoft wasn’t asked to make revisions to its initial offer in the face of recent signs of opposition to a deal from Chinese government officials, the person added.
It’s unclear whether a deal with Oracle would pass muster with the Trump administration, according to a person familiar with the discussions. But couching the deal as a corporate overhaul may help in Beijing. It could allay fears about TikTok’s cache of sensitive US data while addressing Chinese concerns over the export of key artificialintelligence technology, said Yik Chan Chin, who researches global media and communications policy at the Xi’an Jiaotong-Liverpool University in Suzhou.
“If you say this is a hostile takeover, that may not be nice for both parties,” she said. “But if you frame it as like a restructuring or spinoff,” that’s more acceptable to the two governments.
China’s government on Monday declined to comment on the prospect of a ByteDance-Oracle tie-up.
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