Oracle Beats Microsoft in Bid to Buy Tiktok’s US Business

Oracle, which sells database and cloud systems to businesses has won the bid to have TikTok operations.

The firm is set to be announced as TikTok’s “trusted tech partner” in the U.S in a which is likely not to be structured as an outright sale, people familiar with the developments have said.

In earlier reports, Oracle had set out to buy TikTok businesses in the U.S, Canada and New Zealand from ByteDance. Oracle was backed up by venture capital firms General Atlantic and Sequoia Capital who are major investors in ByteDance.

On Monday, Microsoft announced that TikTok had rejected their bid to buy their U.S operations at the last minute.

Despite losing the bid, Microsoft claims they would have been the best bidder since they are more experienced in content moderation compared to Oracle. This is seen through their services like LinkedIn.

In a press statement, Microsoft said they “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.”

Their loss has paved the way for Oracle to win the bid and President Trump said Oracle would be a great company for it to handle TikTok operations. Oracle’s Chairman, Mr Larry Ellison has been Trump’s supporter and held one of Trump’s fundraising events in February.

While the Microsoft loss might look like a missed opportunity, it might actually be a good thing for the company. Microsoft managed to keep a low profile and build strong relations with the Trump administration hence the President giving them a go-ahead for the bidding. However, Microsoft started its relations in China in 1992 when helping government computer systems comply with the government censorship controls. Therefore, any deal would face scrutiny from both China and the U.S making the company open to opportunities to be penalized or look extremely compliant to one side of the cold war.

China has, however, signaled that it would rather see TikTok be banned than allow a forced sale by issuing new tech export controls that cover the recommendation algorithms that drive TikTok’s success.