What The New Oracle Deal Could Mean For TikTok
The long, complicated saga surrounding TikTok’s potential U.S. ownership is finally...over? Maybe. On Sunday, Microsoft announced that ByteDance, TikTok’s Chinese parent company, had rejected its bid, leaving Oracle as the sole buyer. Yesterday evening, the Wall Street Journal reported that Oracle had won out, narrowly meeting the September 20 deadline first set by President Trump back in August. However, it’s not a done deal. ByteDance has already said it would not sell TikTok to either Microsoft or Oracle, and a TikTok employee’s plea challenging Trump’s ban itself is set to be heard on Tuesday.
Should things move forward with Oracle, they won’t be cut-and-dry, and could mean a lot of changes are coming for the app Gen Z and at least 100 million other users know and love. Here’s what we know so far about Oracle and TikTok’s deal:
It’s a partnership, not an ownership
While Microsoft (and, remember, Walmart) had put in a bid to outright buy TikTok over from Chinese ownership, the Oracle deal is different. The two companies will instead be “technology partners,” according to the New York Times. The specifics of this are unclear, but most importantly, no one knows if this satisfies the conditions of Trump’s ultimatum. Those TikTok creators freaking out about the ban over the summer still shouldn’t breathe a sigh of relief.
ByteDance will retain TikTok’s source code (AKA the secret sauce)
This is the biggest threat to the U.S. success of TikTok. According to CNN, Chinese state broadcaster CGTN said ByteDance would not "give the source code" to any US buyers, per anonymous sources. What about “technology partners”? Time will tell, but it’s safe to say a TikTok without the technology that created things like the For You page is not really, well, TikTok. ByteDance threatening to withhold the very magic that keeps people on the app in the first place is not a promising start for TikTok’s new era.
Oracle buying TikTok without its AI despite having zero experience in social =— Josh Constine -SignalFire (@JoshConstine) September 14, 2020
-A moderation time bomb
-A broken app with no recommendation algorithm
-China’s current best case scenario
Oracle is buddies with Trump
This whole thing is happening because Trump and his administration decided to use TikTok as a pawn in escalating tensions with China. However, this deal could give Trump the best of both worlds: a U.S. TikTok and a TikTok in his corner. Oracle’s founder, Larry Ellison, hosted a Trump fundraiser this year. Safra Catz, its chief executive, also served on the president’s transition team.