Silicon Valley tech giant Oracle is “very close” to reaching an agreement to become the US partner of Chinese video app TikTok to avoid a ban in the United States, President Donald said on Tuesday Trump.
Trump’s comments came a day after U.S. officials confirmed that Oracle was close to making a deal with TikTok’s parent ByteDance before a deadline set by the U.S. president, who qualified the app. threat to national security.
“I heard they are very close to a deal,” Trump told reporters, adding that “we are going to make a decision very soon” on the approval of the merger, which would make Oracle a ” trusted technology provider ”. for TikTok.
Details of the deal remained unclear.
But the Financial Times reported that ByteDance is due to place TikTok’s global business in a new US-based company, with Oracle investing as a minority shareholder along with other US investors.
CNBC reported that the Trump administration could approve the deal as early as Tuesday afternoon.
President Trump said on Tuesday that Silicon Valley tech giant Oracle was “very close” to reaching a deal to become the US partner of Chinese video app TikTok
Oracle has agreed to buy a minority stake in TikTok’s global operations, which would be transferred to the United States in hopes of satisfying the Trump administration, report says
If the deal happens, it would avoid an outright sale of TikTok while giving a stake in the popular app to Oracle, whose founder Larry Ellison is a Trump supporter.
Trump told reporters on Tuesday he had “great respect for Larry Ellison.”
Last month, Trump gave his backing to the purchase of Oracle TikTok, calling it a “big business” and saying, “I think Oracle would definitely be someone who could handle it. “
Trump’s seal of approval has drawn renewed attention to his ties to Oracle co-founder Larry Ellison, who is expected to see a big payoff thanks to the TikTok deal.
Ellison secured his place as the fifth richest person in the United States this year as his net worth reached $ 74.9 billion, according to Forbes.
In February, the outlet reported that it had organized a fundraiser for the Trump campaign – which it claimed not to have attended – where tickets cost up to $ 250,000.
Ellison was also considered the first person to speak to Trump about hydroxychloroquine as a potential treatment for COVID-19, before the President aggressively conveyed this message in the absence of scientific evidence from the effectiveness of the drug against the virus.
As part of the deal, TikTok will be restructured as a new US-headquartered company while Oracle, which will hold a minority stake, will manage US user data in hopes of winning Trump’s approval.
The changes are part of an agreement between Oracle and TikTok’s Chinese parent company, ByteDance, which is subject to the Trump administration’s approval.
Oracle co-founder Larry Ellison’s ties to President Donald Trump have attracted close scrutiny following reports the software company won a bidding war over TikTok’s US operations
ByteDance had been in talks to cede only the US portion of TikTok to Oracle or Microsoft, after Donald Trump said he would ban the hugely popular application of short videos if it was not sold to a US company that allegedly monitoring user data.
But the new plan would see all of TikTok’s global operations moved to a new US-based company – but ByteDance would retain its controlling stake.
As part of the deal, Oracle will own a minority stake in TikTok’s global operations and manage US user data.
While TikTok is best known for its dance videos that go viral among teens, US officials fear that user information could be passed on to the Chinese Communist Party government.
TikTok, which has up to 100 million US users, said it would never share this data with Chinese authorities.
TikTok user data is currently stored in Alphabet Inc’s cloud, with a backup in Singapore.
Sales negotiations were turned upside down when China updated its export control rules last month, giving it a say in transferring the TikTok algorithm to a foreign buyer.
Reuters reported last week that China would rather see TikTok shut down in the United States than allow a forced sale.
Oracle and ByteDance are hopeful that the new deal, which will include a pledge to create 20,000 new American jobs, will receive the president’s blessing even though it appears to fall short of the Chinese company’s demand to completely disengage from TikTok.
Microsoft said on Sunday it had been informed by ByteDance that the Chinese company would not sell TikTok’s US operations.
The CEO of TikTok’s parent company was reportedly upset. Microsoft said the social media platform posed a “security risk” that it could “resolve” before talks about selling the app broke. ‘collapsed in favor of a partnership with Oracle.
ByteDance founder and CEO Zhang Yiming’s decision to drop his pursuit of a sale of TikTok’s US operations to Microsoft in favor of a partnership with Oracle was the culmination of weeks of pressure from the Chinese government and investors of the Beijing-based company, according to people familiar with the proceedings.
Walmart, which had joined Microsoft’s offer, said it was still interested in investing and would talk more with ByteDance and other parties.
News of the deal pushed Oracle’s stock price up nearly 3% on Tuesday
Under the terms of the deal, Oracle will own a minority stake in TikTok’s global operations, not just their US-based holdings.
ByteDance, however, will retain a controlling stake in the new US-based entity, the Financial Times reported.
U.S. lawmakers from both main parties have expressed skepticism about the proposed deal which appears to end before the full sale of ByteDance’s popular social media app as Trump demanded.
Oracle said Monday that it was part of a proposal submitted by ByteDance to the Treasury Department to serve as a “trusted technology provider” to Bytedance, without further details on the terms of the deal.
Trump has made it clear that he wants to see an outright sale of TikTok to a U.S. company, raising questions over whether to approve the deal, fearing that U.S. user data will be passed to the Chinese government.
Trump issued an executive order last month banning TikTok in the United States as early as September 20 if ByteDance does not comply with a sale.
Zhang Yiming (left), the founder and CEO of TikTok’s parent company ByteDance, was reportedly upset when prospective TikTok buyer Microsoft (led by CEO Satya Nadella, right) called the app “risky”. security ”which can be“ corrected ”.
In a letter to Treasury Secretary Steven Mnuchin, who heads a national security panel examining the deals, Republican Senator Josh Hawley on Monday called for the proposal to be rejected.
“An ongoing” partnership “which allows for anything other than the total emancipation of TikTok software from the potential control of the Chinese Communist Party is wholly unacceptable and wholly incompatible with the Presidential Order,” Hawley wrote.
Democratic Senator Richard Blumenthal stopped before calling for the deal to be scuttled, but asked for key assurances.
“I want specific and irreproachable commitments on how Oracle and ByteDance will guarantee the privacy, cybersecurity and freedom of expression of users,” he tweeted.
Treasury Secretary Steven Mnuchin said on Monday the Trump administration would review the deal for Oracle to become TikTok’s “trusted technology partner”
Although the Trump administration has yet to say whether it will approve the deal, White House adviser Jared Kushner said on Tuesday the White House was considering Oracle’s offer, even as other lawmakers aimed specifically the company’s own background.
“Making Oracle a middleman won’t protect Americans from Chinese government influence, and to make matters worse, Oracle has a horrific track record of collecting and selling American private data to anyone with a credit card,” Democratic Senator Ron Wyden said in a statement. .
Oracle did not immediately respond to a request for comment, but in 2015 it settled Federal Trade Commission allegations that it failed to notify customers of unresolved hacking dangers when it issued bids. Security update for the approximately 850 million US computers running Java SE software.