Oracle Beats Microsoft In Bidding For TikTok, But On Some Major Conditions!

The bidding war for the operations of TikTok in the US is over as according to insider reports, it seems like Oracle has been chosen as the “trusted tech partner” by Bytedance while ruling out Microsoft from the race.

The news was first revealed by Wall Street Journal that has also cited that a person close to the matter has told that Oracle’s deal is not structured as an outright sale instead the company is chosen for its 40-year track record providing secure, highly performant technology solution which indeed was what both the US government and owner of the Chinese entertainment app wanted. And to top off the news with a cherry, Oracle is also a well-known ally of Trump’s administration in the Silicon Valley.

Thankfully, this Oracle-TikTok tie-up would finally set the future of the app bright in the country and Americans won’t have to worry about finding an alternative or giving up on their newly-found popularity (in case if you were a TikTok star). The deal has been made well in time as there is almost a week to go before September 20 - the date that Trump’s administration had set for a ban on TikTok’s administration in case of now agreement with a buyer. There was also one more deadline set by Trump later of 15th September, but fortunately, the case is now safe.

However, as compared to Oracle, Microsoft’s bid was also not bad before getting declined by the parent company Bytedance this Sunday. In fact, Microsoft’s proposal included protecting national security interests by making the much-needed changes in the infrastructure exclusively for the app itself. But as TikTok was mostly at a war with the Trump’s administration, Oracle’s choice seemed more reasonable in the scenario.

In addition to Microsoft, there was also Twitter, Google and Walmart that wanted to make a deal of acquiring TikTok’s operations in the US but none of them could make it happen.

On the other hand, this deal for Oracle has come at a time when the company has just come out of its database roots and are now trying to excel in market automation and cloud infrastructure. Today, they are not only known as a database maker or provider, but they also capitalize on the data stored with them. So, ending up in a deal with TikTok is of course massive for them and will add up a lot of load onto their infrastructure service too.

Now if we compare the viral loads, Microsoft could have boosted Tiktok’s usage by 2% to 5% whereas Oracle can make a 10% increment happen. And here too, the decision to go with Oracle makes a lot of sense.

As Bytedance has submitted the proposal of Oracle-Tiktok tie-up ByteDance to the Treasury Department of the US over the weekend, there are still uncertainties about how will the Chinese government respond to this. Just tow weeks ago, the Chinese policy makers have introduced a new set of trade rules and going by it, one can expect a ban on the export of artificial intelligence technologies which serves as a primary foundation of TikTok’s feed. This move has been made to complicate the TikTok deal a bit more and not so surprisingly, Bytedance has agreed to strictly abide by the law for the deal.

Furthermore, right before the deal could take place, there was also news from Beijing stating that the Chinese government would choose to shut down operations of TikTok in the US instead of following Trump’s order to sell the app.

Nevertheless, with all being said and done, it is expected that some form of transaction will still happen but there is a clear chance of TikTok’s proprietary algorithms developed by ByteDance’s Beijing office going down the drain. This also means that if TikTok wants to continue its operations in the US, the new owners will now also have to rewrite the code. Now as Oracle won’t be a major stakeholder, there would just be an investment tie where TikTok will take advantage of Oracle’s cloud services and that surely can alone be enough for the partnered company as TikTok has over 100 million users in the US alone.

Photo: VCG via Getty Images

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