On Sunday night, Microsoft dropped out of negotiations to buy the ByteDance-owned video-sharing app, leaving rival Oracle to clinch the deal. The software giant will act as a technology partner and manage TikTok’s U.S. user data. Treasury Secretary Steven Mnuchin said a government review would assess the deal based on whether it satisfies the White House’s worries about the security of that data. (CNBC, Reuters)
Talking point: The deal includes a commitment to establish TikTok’s global headquarters in the U.S. and create 20,000 new jobs in the country. However, the partnership falls short of the outright sale Washington was looking for to address censorship concerns and alleged national security concerns over TikTok’s ties to Beijing. It’s unclear how Oracle’s involvement will temper those concerns. For example, there are no plans for Oracle to rewrite TikTok’s algorithm or take over content moderation. Washington and Beijing both need to sign off on the deal by Sunday for it to proceed. While it doesn’t meet the U.S.’s original criteria, Oracle may benefit from its CEO’s support for the president and the firm’s ties to the administration.