The "TikTok" 101

ByteDance has finally chosen its suitor to take over TikTok’s U.S. operations. And the rose goes to…


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Oracle

The Silicon Valley software giant beat out some of the biggest names in corporate America to land the megapopular video app and its 100 million monthly users in the U.S. But there’s a reason we’re not using the word “sale.”


The WSJ says Oracle will be TikTok’s “trusted tech partner”—not acquirer. A full sale isn’t expected to be a part of the fine print.

The backstory: would take longer than Dominic Thiem’s victory at the U.S. Open. Last month, President Trump ordered ByteDance, the Chinese tech company that owns TikTok, to sell TikTok’s U.S. operations to an American company or else face a ban.


TikTok is considered a national security threat by the White House so long as it’s owned by ByteDance. The U.S. fears that ByteDance could be compelled to hand over Americans’ personal info to the authoritarian Chinese government.

TikTok has repeatedly said it wouldn't hand over user data.

The president’s threat to ban TikTok set off a Frodo-style quest among all the companies that could scrounge up enough cash to place a bid. Oracle’s main competitor was Microsoft (with an assist from Walmart), but Microsoft said earlier on Sunday that ByteDance rejected its offer.


What’s next

There are still a number of big questions to be answered, including a) if this isn’t a sale...what are the exact terms b) will it satisfy the desires of the U.S. and Chinese governments, and c) what is the fate of TikTok's legendary algorithm at the center of the dispute?


However the details shake out, it’s clear that the TikTok saga is a turning point in U.S.-China relations. For years, China has demanded steep concessions from American firms to operate in the mainland; now the U.S. is returning the favor with its historic intervention in a major Chinese cultural export.


-The Morning Brew



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