ByteDance dropped from selling TikTok in the United States on Sunday (September 13) in search of a deal with Oracle that it hopes will spare it a US ban while appeasing the Chinese government, people familiar with the matter told Reuters.
After US President Donald Trump ordered the sale last month and threatened to shut down the famous American short-video app, the Beijing based company had been in talks to divest TikTok’s US business to either Oracle or a Microsoft-led consortium.
Though TikTok is best known for its videos of people dancing that goes viral, US officials have expressed fears that user information could be passed on to the communist government of China.
The business exchanges were halted by an adjustment in China’s fare control laws before the end of last month, which gave a state in offering the TikTok calculation to an unfamiliar purchaser. Reuters said a week ago that the Chinese government would prefer to close down TikTok in the United States than let it be essential for a constrained deal.
Under the proposed contract, Oracle will be ByteDance ‘s technology partner and will assume responsibility for handling TikTok’s U.S. user data, sources said. Oracle is also negotiating the acquisition of a stake in TikTok’s US assets, sources added.
Some of ByteDance ‘s top supporters, including investment firms General Atlantic and Sequoia, would also have a minority stake in TikTok’s US operations under the proposed contract, one of the sources said.
It is uncertain if the proposed agreement would be accepted by Trump, who wants a US technology firm to own much of TikTok in the U.S. The Committee on Foreign Investment in the United States (CFIUS) is monitoring the talks between ByteDance and Oracle, which review deals on possible national security risks.
ByteDance plans to claim that CFIUS’s approval of China Oceanwide Holdings Group’s acquisition of US insurer Genworth Financial two years ago provides a precedent for the structure of the deal it is proposing with Oracle, the sources said.
ByteDance and Oracle did not respond immediately to requests for comments. The White House did not leave any official release. But the retail giant Walmart, which joined Microsoft in its bid, said on Sunday that it continued to have an interest in a TikTok project and that it would have more discussions with the leadership of ByteDance and other stakeholders.