- Oracle seeks to become TikTok’s “trusted tech partner” Monday after the Chinese app’s parent company turned down a bid from Microsoft to buy the company, Microsoft announced.
- If the White House accepts the deal, which does not address national security concerns, then that would “demonstrate that this exercise was pure grift,” former Facebook security chief Alex Stamos said.
- Oracle’s co-founder, Larry Ellison, reportedly hosted a fundraiser for Trump in February and told Forbes in April that he supports the president and hopes he does well.
Some prominent tech experts panned the partnership proposal Oracle reportedly reached with TikTok over the weekend, arguing that the agreement is unlikely to solve national security concerns the United States has with the Chinese app.
Oracle will become TikTok’s “trusted tech partner” after the app’s China-based parent company, ByteDance, turned down a bid from Microsoft to buy the app, The Wall Street Journal reported Sunday night, citing people familiar with the move. Details about the deal are unknown, and the report did not flesh out whether the agreement includes a transfer of TikTok’s algorithms.
Microsoft announced Sunday that it was no longer in the running for the sale. “We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating misinformation,” the company said in its statement. “We look forward to seeing how the service evolves in these important areas.”
Former Facebook security chief Alex Stamos suggested the deal looks more like a hosting opportunity rather than an outright sale. (RELATED: TikTok Could Become A Powerful Propaganda Tool If It Stays With China, Experts Warn)
“A deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok, and the White House accepting such a deal would demonstrate that this exercise was pure grift,” Stamos, who now works as a researcher at Stanford University, wrote on Twitter Sunday.
Many lawmakers and American officials believe the app is a threat to national security through its collection of user data.
Treasury Secretary Steven Mnuchin confirmed elements of the deal Monday on CNBC, noting that the Treasury-led Committee on Foreign Investment in the U.S. would review the Oracle bid this week. The agreement will include a promise to make TikTok a global company based in the United States, Mnuchin explained. The deadline for the ban is now Sept. 20, he added.
President Donald Trump signed a pair of executive orders Aug. 6 prohibiting individuals from communicating with the social media app’s Chinese parent company, ByteDance, after 45 days. The orders barred “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States,” with ByteDance and Tencent Holdings, the parent company of WeChat.
Other tech writers and experts weighed in on the deal.
“Essentially a chance of vendor[sic]. Like all things Trump, all hat no cattle,” Kara Swisher, co-founder of Vox blog Recode, wrote in a tweet Sunday.
Tim Wu, an academic who focuses on antitrust issues and the technology industry, also criticized the partnership in a tweet Monday.
“If the US wanted to do something about Chinese state influence over TikTok, it should actually do something, not accept some kind of ‘Oracle partnership.’ How about an IPO?” Wu wrote. He served as a senior advisor to the Federal Trade Commission from 2011 through 2012 and his academic specialities include copyright and telecommunications law.
The president suggested on Aug. 3 that he is amenable to the idea of Microsoft purchasing the upstart Chinese company, so long as the acquisition comes by Sept. 15. Twitter and Oracle have also expressed an interest in buying the app’s U.S. operations, media reports show. Trump also said a portion of profits from a potential sale should go to the United States Treasury.
Oracle was working with investors that already own a stake in ByteDance, including Sequoia Capital, the Financial Times reported in August. Doug Leone, a Sequoia global managing partner, pressed the U.S. Treasury and White House adviser Jared Kushner to find a solution to keep TikTok in the U.S., WSJ noted in an Aug. 9 report, citing sources familiar with the discussion.
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