Microsoft Exits TikTok Negotiations as Oracle Steps In

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The plot thickens in the TikTok saga. As the clock ticks on President Trump’s executive order that will ban the app if it doesn’t find an American buyer by late September, the Chinese-based app is scrapping plans for a Microsoft acquisition. Now, it looks like Oracle, the enterprise software firm, will be taking control of technology operations of the popular video-sharing app in the United States.

Microsoft Is Out

Most speculators had viewed Microsoft as the most-likely American tech company to purchase TikTok from its Beijing-based parent, ByteDance. Microsoft had both the financial and consumer acumen as well as the greatest ability to address the national security concerns at the heart of Trump’s order.

The President has demanded that the app find an American buyer out of fear that TikTok collects user data and shares it with the Chinese government. Soon after releasing his executive order, Trump met with higher-ups from Microsoft, increasing speculation that the Seattle-based tech giant would acquire TikTok’s U.S. operations.

But this weekend, Microsoft released a statement revealing that ByteDance had rejected its offer. “ByteDance let us know today that they would not be selling TikTok’s U.S. operations to Microsoft,” the statement read. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

At the same time, people involved with the negotiations have confirmed that TikTok chose Oracle as its technology partner in the U.S. It is not yet clear, however, whether Oracle will also take a majority ownership stake in the app.

Trump’s Support

Despite Trump’s threat to block TikTok by September 20 if it can’t find an American buyer, negotiations have only been hindered by Beijing. Last month, China issued a new law that would prevent TikTok from selling its technology to a foreign buyer without the explicit permission of the Chinese government. The new regulations significantly complicated the Microsoft deal.

But even now, as Oracle attempts to step in, Beijing may well wrap the deal in red tape once again. Still, a major difference between Microsoft and Oracle are their respective ties to President Trump. Oracle’s founder, Larry Ellison, and its current president, Safra Catz, are both friends and fundraisers of the President’s, which means that Trump might feel more urgency to facilitate a deal between the Silicon Valley software company and Beijing. Additionally, as the election approaches, Trump’s friends at Oracle could make it easier for him to close a deal and add another trade accomplishment to his CV before voters head to the polls in November.

For his part, Trump has said he would support Oracle, a “great company,” in a bid to buy TikTok. “I think that Oracle would be certainly somebody that could handle it,” the President has said.

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