Oracle confirms bid to become TikTok's "trusted tech partner"

Oracle has confirmed that it's working in conjunction with ByteDance over a prospective agreement regarding the future management of TikTok's US operations.

The US Secretary of the Treasury Steven Mnuchin said in an interview with CNBC this afternoon that the Trump administration received a proposal over the weekend putting forward Oracle as the "trusted technology partner".

Oracle, Mnuchin added, made representations over the national security question and issued a commitment to create TikTok Global as a US-headquartered company, creating 20,000 new jobs.

The Treasury Secretary confirmed the Trump administration would be reviewing the proposal this week ahead of the 20 September deadline set in the Executive Order in August.

"Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider," an Oracle spokesperson confirmed with IT Pro.

"Oracle has a 40-year track record providing secure, highly performant technology solutions."

The US administration's main objectives, when approaching its review over the coming week, is to ensure the source code, US customers' data and devices using TikTok, are all secure.

Original article published 14/09/20: Oracle 'set to partner' with TikTok after Microsoft offer rebuffed

Oracle has reportedly been chosen as the “trusted tech partner” for the Chinese social media app TikTok’s overseas operations after Microsoft revealed that ByteDance rebuffed its attempts to acquire the division.

While it’s unlikely TikTok will be sold in full to the US cloud computing giant, according to Reuters, Microsoft’s failure to secure a deal has led many to believe that TikTok is within striking distance of reaching an agreement with Oracle.

With Microsoft out of the running, Oracle has until 20 September to agree an arrangement with ByteDance in order to satisfy the US authorities, who view the Chinese-owned social media app as a potential national security risk.

US President Donald Trump effectively banned the widely-used social media app in August and demanded that ByteDance divest its local assets, raising the interest of Microsoft and Oracle. Although the former looked most likely to oversee TikTok’s US operations, discussions ended over the prospect of a sale this weekend.

“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” the firm said in a statement.

“To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”

While this now leaves Oracle in the driving seat over any prospective deal, conflicting reports from state-controlled Chinese outlet CGTN suggest ByteDance would neither sell its US operations to the US cloud giant.

ByteDance will not sell TikTok’s US operations to Microsoft or Oracle, nor will the company provide the source code to any US buyers, according to sources speaking with the outlet.

Recently updated Chinese export rules would, in any case, prohibit TikTok’s source code or algorithm being transferred to a US company, and may perhaps serve as one of the biggest stumbling blocks in negotiations..

Refusing to sell TikTok’s US operations to Oracle would not be incompatible with reports that the company would become ByteDance’s “trusted tech partner” in the US, as suggested by Reuters, however.

Such an arrangement may not be sufficient to satisfy the demands of US authorities, who have lobbied for a complete excision of ByteDance’s involvement in TikTok’s operations in the country, hence conversations over a sale.

This alternative could see ByteDance retain majority ownership over the division, but use Oracle’s infrastructure to process the data of US users and continue the smooth-running of the service.

Incidentally, Trump had previously backed Oracle's efforts to takeover TikTok's operations in the US, lavishing praise on co-founder and current CTO Larry Ellison.

IT Pro approached Oracle for clarification but the firm declined to comment.

Keumars Afifi-Sabet

Keumars Afifi-Sabet is a writer and editor that specialises in public sector, cyber security, and cloud computing. He first joined ITPro as a staff writer in April 2018 and eventually became its Features Editor. Although a regular contributor to other tech sites in the past, these days you will find Keumars on LiveScience, where he runs its Technology section.