TikTok’s deal with Oracle is a bet that Trump will cave on concerns over China


On the eve of the deadline for ByteDance to sell TikTok, there was much movement and little certainty. The whole thing seemed to come down to three words — “trusted tech partner” — and no one I’ve spoken to seems to know what they mean.

The most recent events were set in motion on Sunday afternoon, when ByteDance announced that it had rejected Microsoft’s bid to acquire TikTok in favor of an extremely vague partnership with a 43-year-old enterprise software company. The gist seems to be that Oracle would store American TikTok users’ data and keep it secure, but the app itself would continue to be owned and operated by ByteDance.

It could also include voting control over by TikTok by its US-based investors, the New York Times reported. Oracle and Walmart are both separately negotiating for stakes in TikTok’s American business, according to CNBC, which would still stop well short of an outright sale.

And now everything hinges on whether President Trump will accept ByteDance’s offer, or follow on his threats to ban the app in the United States.

Trump’s stated reason for forcing a sale was to protect Americans from Chinese influence — either the misuse of their data, or the manipulation of TikTok for propaganda purposes. As Russell Brandom notes at The Verge, an Oracle deal might partially address the former concern, but would do nothing about the latter. Microsoft’s offer, by contrast, had attempted to solve for both. He writes:

Microsoft’s version of the deal would have severed American TikTok from Europe and Asia entirely, but Oracle’s version of the deal leaves it mostly intact. US TikTok will stay the same as Korean TikTok and Nigerian TikTok; it’s just getting an extra babysitter. That makes it less of a sale and more of a glorified hosting deal. It lets Trump say he’s solved the problem but doesn’t do much else.

Microsoft underlined this point in its official statement announcing it had not been chosen. “We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting misinformation,” the company said in its statement. “We look forward to seeing how the service evolves in these important areas.”

The implicit message is clear: we wanted to change TikTok to actually make it safe, and ByteDance said no.

In doing so, ByteDance has essentially called Trump’s bluff — wagering that he will accept the deal, reward a loyal friend in Oracle, and declare total victory. This … does not seem like a bad bet? It’s a high-stakes bet, to be sure, and one with a significant downside. It still seems entirely within the realm of possibility that TikTok in the United States as we know it will disappear. But if you’re ByteDance, and trying to make the best of an attempted mugging, it would probably look something like this.

At Stratechery, Ben Thompson underscores the still-shocking degree to which the fate of an app used by hundreds of millions of people will all come down to the whims of the president:

Of course, Trump being Trump, no one knows what will happen next. Will he accept ByteDance’s offer to claim victory while actually capitulating? Will he fear the electoral consequences of banning a popular app? Will he be put off by China’s attempt to put him on the spot? Or, most optimistically, will he actually follow through on his alleged national security concerns? Needless to say, given the way in which this entire sordid episode has made a mockery of the rule of law, I’m not optimistic, but, well, hope springs eternal.

Among the people who saw through ByteDance’s revised offer was Sen. Josh Hawley, R-MO, who called on the Council for Foreign Investment in the United States to reject it.

“Any corporate shell game that leaves TikTok in the hands of ByteDance will simply perpetuate the original problem, leaving U.S. national interests and everyday users at serious risk,” he wrote. “ByteDance, as TikTok’s parent company, will continue to be subject to Chinese laws that put Americans’ data at risk. That is precisely the problem that the President’s action sought to solve, and it is that same problem that the proposed Oracle partnership leaves fully intact. In short, the proposal violates the President’s executive order.”

I reached out to Oracle to see if the company had any additional light to shed on the weekend’s events, but didn’t hear back. I imagine it is having a very busy day.