ByteDance Rejects MS Acquisition Proposal
Oracle Also Likely to Struggle Securing Controlling Stake
[Asia Economy New York=Correspondent Baek Jong-min, Beijing=Correspondent Jo Young-shin] The sale of the Chinese video-sharing application 'TikTok,' a key point of conflict between the United States and China, in the U.S. has gained momentum. ByteDance has effectively chosen Oracle, a U.S. database company, as the buyer.
On the 13th (local time), American media such as The Wall Street Journal (WSJ) and The New York Times (NYT) reported that ByteDance, TikTok's parent company, rejected Microsoft's (MS) offer to acquire TikTok and that Oracle has effectively secured the acquisition.
Microsoft confirmed in a statement that they were eliminated from the acquisition race. ByteDance plans to request purchase and sale approvals from both the U.S. and Chinese governments respectively.
Oracle entered the TikTok acquisition race as a latecomer after Microsoft but managed to seize the opportunity to enter the social networking service (SNS) market by surpassing Microsoft, which has enormous financial resources.
This decision was made just days before the deadline set by U.S. President Donald Trump, who banned transactions with ByteDance, TikTok's parent company. President Trump mentioned the ban on TikTok usage in the U.S. would take effect by the 15th of this month, but the executive order set the deadline as the 20th.
However, there are also views that it is unclear whether Oracle has actually acquired TikTok. WSJ, citing sources, reported that Oracle was selected as TikTok's trusted U.S. partner and that this deal would not proceed as a full sale.
There are various interpretations within the U.S. regarding why Oracle was chosen as the final acquirer of TikTok. Microsoft had been considered a strong candidate due to its financial and technological advantages over Oracle.
However, ByteDance has drawn a line stating that even if TikTok is sold, the core algorithm is not subject to sale or transfer, making it uncertain whether President Trump will accept this. The Hong Kong South China Morning Post (SCMP), citing a source familiar with discussions at the ByteDance board meeting, reported that ByteDance excludes the algorithm from the sale even if TikTok is sold. SCMP likened it to selling a car but not selling the engine.
An anonymous source added, "The company will not hand over the source code of the software to any U.S. buyer, but the U.S. TikTok tech team may be able to develop a new algorithm." ByteDance is known to have communicated this fact to U.S. authorities and potential TikTok buyers.
The Chinese government, in response to the Trump administration's pressure on domestic companies such as banning TikTok usage in the U.S., has effectively banned the export of advanced technology and the overseas sale of companies possessing advanced technology.
Some expect that if ByteDance selected Oracle through a political decision, it could serve as a catalyst for U.S.-China relations. Oracle's selection can be interpreted as a gesture from the Chinese government to President Trump aimed at improving relations.
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