Tiktok’s deal is finally settled! Oracle won an agreement to manage tiktok’s cloud business in the US, and US Treasury Secretary Steven mnuchin confirmed the deal, which means tiktok will continue to operate in the United States.
However, the deal is not an acquisition, but Oracle has become tiktok’s “trusted technology partner”. The details of the agreement have not been announced. Unlike the direct sale, it seems that Oracle will support tiktok’s operations in the United States through its own cloud technology. But no matter what the details are, it’s a relief for tiktok’s 1400 employees and tens of millions of users in the United States.
Fuzzy cooperative relationship between Oracle and tiktok
The deal reached on a deadline is unusual in many ways. First, it is not an acquisition at all. Oracle and tiktok have entered into a vague partnership. It is not clear what Oracle’s “trusted technology partner” status really means.
“If Oracle takes over tiktok without source code and major operational changes, the deal will not address any legitimate concerns about tiktok, and the White House’s acceptance of the deal will show that it is a pure hoax,” Alex Stamos, a former Oracle security chief, tweeted
Oracle does not rewrite tiktok’s algorithms or process audits; it acts more like a tiktok contractor. After the introduction of China’s export control regulations, the US centered acquisition proposed by trump has become more difficult.
The algorithm technology is still in the hands of tiktok
Yesterday, Microsoft announced in an official statement that “byte skipping, the parent company of tiktok, rejected its bid, and stressed that” we will make major changes to ensure that the service meets the highest standards of security, privacy, online security and error free information. ” The implicit message is very clear. What Microsoft wants to say is that “we want to make tiktok more secure and completely controlled by us, but byte skipping refuses us.”
If tiktok had chosen Microsoft, the deal would have completely cut off tiktok’s business in the United States, Europe and Asia. However, Oracle is unlikely to take over any important business from tiktok.
US senators propose to reject Oracle’s cooperation with tiktok
After the agreement between Oracle and tiktok, US Senator Josh Holly publicly called on the Treasury Department to reject the proposed partnership between Oracle and tiktok, saying that such an arrangement was totally unacceptable for national security considerations.
Currently, the cooperation between Oracle and tiktok has been approved by U.S. Treasury Secretary Steven mnuchin, but the deal is still waiting for the decision-making recommendations of the US Foreign Investment Commission (CFIUS).
According to Josh Holly’s proposal, CFIUS should immediately reject Oracle and tiktok’s cooperation and ask byte skipping to sell its code and algorithm entirely to an American company.
It is understood that Oracle’s cooperation with tiktok is quite different from Trump‘s initial request. Some White House officials are not satisfied with the deal, but no one publicly refuses, in part because it may lead to a complete ban on the app.
Tiktok’s final fate is still in the air
The cooperation between Oracle and tiktok did not achieve the goal that the trump government expected to completely cut off its contact with its Chinese parent company. Oracle’s becoming a “reliable technology partner” only nominally solved the so-called “national security” concerns of the United States.
But the ultimate fate of tiktok’s U.S. business is still in Trump’s hands, and he is expected to receive CFIUS’s advice later this week, when he will know his clear attitude towards the deal.