Oracle Wins Bid for TikTok’s U.S. Operations

Posted on September 14, 2020 by Paul Thurrott in Cloud, Mobile with 20 Comments

After rejecting Microsoft’s bid, ByteDance announced that it will partner with Oracle for TikTok’s U.S. operations. But it’s not clear exactly what that means: Will Oracle become the majority owner of TikTok’s U.S. operations? Or are the firms simply partnering to move TikTok to Oracle’s cloud servers?

We won’t find any answers from Oracle: The firm has yet to even acknowledge that a deal was made.

What is clear is why ByteDance turned down Microsoft: The software giant wanted to move TikTok’s source code to its U.S.-based Azure servers, including its core algorithms. But when China stepped in recently by refusing to export dual-use technologies, including those algorithms, outside of the country, Microsoft’s role was effectively ended. Oracle, meanwhile, was open to a much more limited partnership.

Anyway, from my perspective, this was a bullet dodged for Microsoft. And a big unknown for Oracle, about which I don’t care in the slightest.

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Comments (23)

23 responses to “Oracle Wins Bid for TikTok’s U.S. Operations”

  1. crunchyfrog

    Ha! This is so far from being over. Oracle may have won the battle but the war is just beginning.

  2. linuxlizard

    A co-worker joked, "Makes sense that TikTok would team up with a large legal firm."

  3. rpspiker

    When I first heard about China's refusing to export the technology and algorithm, my first thought was the fear of what all China collecting must be real. They down want anyone outside China looking to close at what and how they are collecting data. Maybe Oracle with do what they did with Open Office and TikTok will become an "also ran" platform.

    • illuminated

      In reply to rpspiker:

      So called "algorithm" is nothing. The meat is what data you feed into it and how do you use it afterwards. In essence the same tech finds best targets for ads, songs you may like, and may determine if you are politically suspicious citizen.

  4. james.h.robinson

    How many "journalists" are going to get this wrong and say Oracle is buying TikTok? I applaud Mr. Thurrott for doing his homework and reporting more accurately than others.

  5. gedisoft

    ”. But when China stepped in recently by refusing to export dual-use technologies, including those algorithms, outside of the country “

    I thought that the Chinese government had nothing to do with Tik Tok ?

  6. waethorn

    This won't even be a thing in 5 years time.

  7. Matthew Santacroce (InnoTechLLC)

    That last sentence was exactly what I was thinking by the time I finished reading this article. Seems like two companies I care nothing about are forming a partnership which I care nothing about. Good luck!

  8. truerock2

    In my opinion, any technology company needs to have a strategy that designs autonomy within any country that it deploys its technology in. Yes, that would be difficult to scale in countries with small economies.

    I worked for a large multi-national corporation for decades that was often required to keep important, strategic data secured in the home country. It is very easy to do. That last interaction I had with a team deploying technology to other countries was where they were deploying "data-center in a box" which was a data-center built in a standard shipping container (with a separate "power" shipping container and it looked like they were going to have a separate "communications" shipping container because power and communications were often country specific.)

    A design problem was data and system backup and disaster recovery. For a while the US corporation was having a problem with accepting that strategic data could not be backed up outside of the home country and it finaly had to reluctantly accept the best they were going to get is a second "data-center-in a box" located elsewhere in the home country.

    These "home" countries tended to be third world and had sub-standard communications infrastructure and often had to rely on satellite and/or microwave.

    A big headache was that the home countries often wanted the technology purchased from local distributors. So, sometimes the whole "data-center in a box" had to be constructed with servers and other equipment purchased locally. It sometimes got really silly where we had to purchase a US product (like a server) built in China to be drop-shipped to the local home country. Everything was a huge headache of paperwork and local customs shinanigans where often we were expected to bribe the local customs officials but we were not allowed by the US corporation to do that. We usually had to rely on local technology "consultants" to get the equipment out of customs - and, it took a very long time to do that.

  9. glenn8878

    How will this deal solve the intended problem of TikTok ownership of customer data? China's acknowledgement of dual use of technologies is troubling. It's like this deal won't stop the US Government from shutting it down regardless. Without full control by a US firm, they should just close the whole thing down.

  10. davidlbangs

    ”. But when China stepped in recently by refusing to export dual-use technologies, including those algorithms, outside of the country “

    Does this mean that code exported from China is precluded from using western servers? Isn’t it also dual use to have the exported code use Oracle API’s?

  11. RonV42

    How soon will Oracles license model prevent this from becoming a reality?

  12. stvbnsn

    So they're partnering with Oracle, but not selling. Doesn't this still come up against the hard wall of American security concerns? The administration seems easily pawned off, I'm not sure CFIUS, or the security and intelligence agencies will be. Seems like a spectacle with no real results.

    • ejuly

      In reply to stvbnsn:

      Oracle has friends in the WH so I see this getting done by November 1. Treasury (CFIUS) will follow orders because Li Keqiang and Trump are personal friends this will get done. Based on what I know now about the deal - it looks like China has also won this trade skirmish.  The Dec 2019 (Phase 1?) trade signing was a clear win for China. When will the USA win one, the last one was 2013?

      • stvbnsn

        In reply to ejuly:

        You think they're looking for wins? I see decoupling as what's trending and peaking it's head around the corner. Campaigns are both running on tough on China, and I'd guess hawks have proliferated through the executive branch now. The hawks aren't looking for wins they're looking for separation, it could turn out they're beaten back by business interests, it's probably still pretty close running, I guess we'll see.

  13. jeff.bane

    I feel like I could hear Paul's sigh of relief from 1000 miles away when I first heard this news :)

  14. jwpear

    Glad Microsoft is out of this. I can't even fathom why this is something Oracle is interested in outside of just another thing running in their cloud.

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