Microsoft was supposed to be the number one candidate to purchase US TikTok until this weekend.
Tiktok has reached an agreement to partner with software giant Oracle, a deal that could remove the UAE and China from the reach of local tech companies.
The deal confirmed on Sunday from a source with firsthand knowledge, pressured TikTok to sell its business in the United States due to concerns about national security threats by the Trump administration. The administration has claimed that the company’s relationships through its parent company, ByteDance, will have to hand over data on Americans when required by the Chinese government. Tiktok has denied it will hand over the data and insisted that it be stored outside of China.
The source did not clarify what parts of the technology were being acquired by Oracle, which did not immediately respond to a request for comment on Sunday. Microsoft was supposed to be the number one candidate to purchase US TikTok until this weekend. Microsoft previously reported that BuyDance had alerted the company that it was passing on its proposal.
The short video app has proliferated in popular culture over the years, and it has become a thing of modern social media to offer American giants like Facebook and Snapchat a reliable competitor. The app, which provides users with the ability to create short videos that match sound or music, has already created its own generation of countless celebrities and dance trends.
But its relations with China emerged as a quiet point of contention in Washington last year. In November, Tiktok was noted to be a threat to national security and the US government opened an investigation into the app. Secretary of State Mike Pompeo has since said that the United States has been “watching” blocking the app and President Donald Trump has threatened to do so multiple times.
“There have been some back-to-back operations going on here since China because China doesn’t allow Google companies like American and Facebook,” said Paul Trullo, head of global technology policy for the Eurasia Group. “All of these measures are part of an effort by the Chinese government to press for this dismantling, which covers a whole range of issues, but over the past three to six months it has taken shape in a way that makes Chinese companies unused vendors.”
On August 6, Trump signed an executive order barring US companies from doing business with ByteDance, claiming the app was risking that amount as a “national emergency.”
The order stated that the app, which was allegedly owned by the United States. It was downloaded 175 million times, capturing “massive amounts” of information and threatening to allow “Chinese government officials” to track down Americans.
Tiktok has repeatedly denied the allegations and said that US user data is located in the United States. There is only one backup copy in Singapore. It also said that its data centers are located outside of China, which indicates that the data is not under Chinese authority.