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According to a new report, the bid for the US operation of the Chinese-owned video-sharing app, TikTok, falls short as Oracle Corp. leaves open some national security concerns about Chinese espionage.
Oracle closed a deal with the developer ByteDance, Tiktok’s Chinese company, beating Microsoft’s bid to acquire TikTok’s US arm. ByteDance had until September 15 to seal a deal that avoids a ban on TikTok in the US. Beijing-based ByteDance, which owns the popular video-sharing app, chose Oracle due to its close relations to the Trump administration and its inclined acceptance to a deal where it didn’t buy 100% of the assets.
President Trump has the full authority to sign off on a deal evading the TikTok ban but is still hesitant as national security officials’ concerns remain firm. The agreement is still on debate and gritty discussions between government officials and the companies. Trump said that he was not yet ready to approve the proposal from ByteDance until it is “100% as far as national security is concerned.”
The US suspected that the Chinese government might access data acquired from American users using this app, which can be a tool for disinformation campaigns. TikTok, on the other hand, denied the allegations, stating that it stores the US user data in the country with a backup kept in Singapore.
The companies need to address these security concerns, but the deal is still unclear. Earlier week of September, ByteDance was in talks with the US government to avoid the 100% acquisition of TikTok operations in the country, including that Oracle would have full access to TikTok’s source code. This agreement will ensure that no back doors exist to siphon from the service having 100 million American users’ personal information.
On Friday, Beijing stated that it would choose to see TikTok shut down in the US than being sold to a domestic company, as discussions are taking place against the prospect of Chinese government restrictions on technology exports.
The White House imposed a deadline of September 20 for the ByteDance to propose a plan to sell the video app’s US operations or be banned by September 29. Although a deal would have been sealed by November 12, Beijing pushed back on a tentative sale of US assets, saying that it would need to approve an agreement involving the exports of the lucrative artificial intelligence technology by TikTok.
Relations between the US and China were considerably not in good terms in recent years because of the trade and race to establish dominance in crucial technological areas, including 5G and semiconductors. The government has heightened the pressure Chinese tech companies like Huawei, ByteDance, and Tencent, making it more complicated for them to operate in the US.