ByteDance abandoned the sale of TikTok in the United States on Sunday in pursuit of a partnership with Oracle that it hopes will spare it a U.S ban while appeasing China’s government, people familiar with matter said according to Reuters.
This is coming after TikTok CEO quit his job amid battle with Washington. Under the proposed deal, Oracle will be ByteDance’s technology partner and will assume management of TikTok’s U.S user data. Oracle is also negotiating taking a stake in TikTok’s US assets.
ByteDance will need approval for the deal from governments of the United States and China
ByteDance, the Beijing-based company had been in talks to divest TikTok’s U.S business to either Oracle or a consortium led by Microsoft after U.S President Donald Trump ordered the sale last month and threatened to shut down the popular short-video app in the United States.
US officials have expressed concerns that information on users of the popular video sharing app could be passed on to China’s communist government.
China’s update of its export control rules late last month that gave it a say over the transfer of TikTok’s algorithm to a foreign buyer resulted in the suspension of sale negotiations.
Reuters reported last week that the Chinese government would rather shut TikTok down in the United States than let it be part of a forced sale.
Some of ByteDance’s top backers, including investment firms General Atlantic and Sequoia, will also be given minority stakes in TikTok’s US operations under the proposed deal, one of the sources said.
It is unclear whether Trump, who wants a US technology company to own most of TikTok in the United States, will approve the proposed deal. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks, is overseeing the talks between ByteDance and Oracle.
Microsoft said earlier on Sunday it was informed by ByteDance that it would not be selling it TikTok’s US operations.
Retail giant Walmart, which had joined Microsoft in its bid, said on Sunday it continued to have an interest in a TikTok investment, and that it would have further discussions with ByteDance’s leadership and other interested parties.
“We know that any approved deal must satisfy all regulatory and national security concerns,” Walmart said.