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ByteDance abandoned the sale of TikTok in the United States on Sunday in pursuit of a partnership with Oracle Corp that it hopes will spare it a U.S. ban while appeasing China's government.
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The Beijing-based company had been in talks to divest TikTok's U.S. business to either Oracle or a consortium led by Microsoft Corp after U.S. President Donald Trump ordered the sale last month and threatened to shut down the popular short-video app in the United States.
While TikTok is best known for its anodyne videos of people dancing that go viral among teenagers, U.S. officials have expressed concerns that information on users could be passed on to China's communist government.
The sale negotiations were upended by China's updating of its export control rules late last month that gave it a say over the transfer of TikTok's algorithm to a foreign buyer. Reuters reported last week that the Chinese government would rather shut TikTok down in the United States than let it be part of a forced sale.
Under the proposed deal, Oracle will be ByteDance's technology partner and will assume management of TikTok's U.S. user data, the sources said. Oracle is also negotiating taking a stake in TikTok's U.S. assets, the sources added.
It is unclear whether Trump, who wants a U.S. technology company to own most of TikTok in the United States, will approve the proposed deal. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks, is overseeing the talks between ByteDance and Oracle.
ByteDance plans to argue that CFIUS' approval two years ago of China Oceanwide Holdings Group's purchase of U.S. insurer Genworth Financial offers a precedent for the deal structurRead More – Source
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