On September 14, local time, after Microsoft confirmed that TikTok had rejected its acquisition request, Oracle confirmed that it had reached an agreement with TikTok’s Chinese owner, Bytedance, to become its”trusted technology provider.” The agreement still needs to be approved by the US government.
Oracle confirms agreement with TikTok owner Bytedance
Oracle Corporation of America on Monday It is confirmed that in the latest plan submitted by ByteDance to the US Department of the Treasury regarding the future of TikTok America, it will appear as a trusted partner, but it does not involve the acquisition of equity, but the specific content of the plan is still not disclosed. .
Previously, U.S. Treasury Secretary Mnuchin said in an interview with the media that the deadline for TikTok’s final solution is September 20. Two procedures are currently in progress, one is the Committee on Foreign Investment in the United States (CFUIS) The other review of TikTok is a national security review based on the Presidential Executive Order.
Mnuchin said that the Treasury Department received a proposal last weekend that Oracle, as TikTok’s trusted data security compliance partner, represents the solution to US national security issues. TikTok will continue to use the United States as its headquarters and create 20,000 jobs for the United States.
It’s worth noting that the solution Mnuchin talked about is Oracle as a data compliance partner, similar to Apple’s data compliance program in China from Guizhou on the cloud, and does not involve the previous Trang Pu’s request to sell TikTok does not involve the transfer of TikTok’s core technology.
Mnuchin stated that the U.S. Treasury Department will review relevant plans with the CFIIS committee this week and make recommendations to the President of the United States for review.
Analysis believes that ByteDance has reached a partnership with Oracle, rather than selling TikTok America, hoping to meet the Chinese government’s technology export requirements while exempting the US ban. At the end of last month, the Ministry of Commerce and the Ministry of Science and Technology of China updated the technology export control rules to give them a say in the transfer of algorithms by Bytedance to foreign buyers, and the related transaction process has become more complicated.
At present, Trump’s attitude towards this latest plan is still unclear. Trump has always emphasized that a U.S. technology company must own the majority of TikTok’s U.S. business, otherwise the program will be prohibited from being used in the U.S. ByteDance believes that CFIUS approved China Oceanwide Holdings Group (China Oceanwide Holdings Group) to acquire American insurance company Genworth Financial two years ago, setting a precedent for its proposed transaction structure with Oracle. In that transaction, Oceanwide Holdings agreed to use a third-party service provider headquartered in the United States to manage Genworth’s US policyholder data. ByteDance believes that similar arrangements can protect the data of TikTok US users.
Oracle is an enterprise software company second only to Microsoft in the world, headquartered in Redwood Beach, California, USA. It officially entered the Chinese market in 1989. The company’s chairman Larry Ellison is one of the few Trump supporters in the tech world. Oracle has significant technical prowess in processing data, but has no experience in social media. Its customers are companies, not consumers.
Affected by this, on Monday local time, Oracle’s stock price soared by nearly 8%. As of the close, Oracle rose 4.32%, with a total market value of US$182.5 billion.
Rejecting Microsoft’s takeover offer
Previously, the closest thing to the acquisition of TikTok’s US business Microsoft has declared that the acquisition has failed.
Microsoft said earlier on Sunday that Bytedance said it would not sell TikTok’s US business to it. The company stated in a statement:Bytedance informed us today that they will not sell TikTok’s US business to Microsoft. We believe that our proposal will benefit TikTok users while protecting national security interests. To do this, we must make major changes to ensure that the service meets the highest standards of security, privacy, online security, and combating false information. We also clarified these principles in our August statement. Looking forward to seeing the development of Tiktok’s services in the United States in these important areas.
TikTok is a Chinese-funded enterprise ByteDance’s application focusing on entertainment short videos. After U.S. President Trump asked ByteDance to order the sale of TikTok on national security grounds last month, and threatened to close the application, American technology companies including Microsoft, Walmart, Oracle, Twitter, etc. were all exposed to ByteDance. Acquisition negotiations.
However, the latest regulations issued by the Ministry of Commerce of China make the sale of TikTok by ByteDance full of variables.
On August 28, the Ministry of Commerce of China, in conjunction with the Ministry of Science and Technology, adjusted and released the”Catalogue of China’s Export Prohibited and Restricted Technologies.” Xinhua News Agency subsequently published”Expanding Foreign Technical Exchanges on the Basis of Maintaining National Security-Authoritative Experts’ Interpretation of China’s Adjustment and Release of the”Export Restricted Technology Catalog”.
The expert interviewed by the article, Professor Cui Fan of China University of International Business and Economics, believes that as a rapidly growing innovative company, Bytedance has a number of cutting-edge technologies in artificial intelligence and other fields, and some technologies may involve The adjusted directory. For example, in the catalog, under the restriction of exporting certain information processing technologies in the computer service industry, the new Article 21 is about”Personalized Information Push Service Technology Based on Data Analysis” and Article 18 is about”Artificial Intelligence Interactive Interface Technology” and other controls The main point may involve the company’s technology.
“If ByteDance plans to export related technologies, it should go through the licensing procedures.” Cui Fan said, ByteDance’s international business can achieve rapid development, relying on its strong domestic technical support. Continuously providing the latest core algorithm services to overseas companies is a typical technical service export. If its international business is to continue to operate smoothly, no matter who its new owner and operator are, it is likely to need to transfer software code or its use rights from China to overseas, and it may also need to provide technical services from China to overseas .
“Therefore, it is recommended that Bytedance carefully study the adjusted catalog, seriously and carefully consider whether it is necessary to suspend the substantive negotiation of related transactions, perform the legal declaration procedures, and then take further actions as appropriate.” Cui Fan said.
On August 30, ByteDance issued a statement stating that the company was concerned that the Ministry of Commerce and the Ministry of Science and Technology jointly announced the”Announcement on Adjusting and Publishing the Catalogue of Technologies Prohibited and Restricted from Exporting China” on August 28.”, the company will strictly abide by the”Regulations of the People’s Republic of China on the Administration of Technology Import and Export” and the”Catalogue of China’s Export Prohibited and Restricted Technologies”, and will handle the related business of technology export.
In other words, even if ByteDance finally chooses to sell TikTok, it will still need to submit an application to relevant government departments. The length of the approval time and the approval results may still have to wait until after the US general election in November.