TikTok owner picks Oracle as tech partner

ByteDance drops app's US sale; China urges fair environment for foreign firms

A deal between ByteDance, the parent of TikTok, and Oracle appeared on Sunday to be edging closer after reports that the Chinese company had chosen the software provider as its US technology partner. If the deal firmed up, it would help keep the popular video-sharing app running in the United States.

Oracle's prospects were boosted when bid rival Microsoft announced on Sunday that Byte-Dance had rejected its offer to buy TikTok's US operations.

However, doubts that a deal with any US buyer would go ahead were fueled by a report from China's state-run English television channel CGTN on Monday. It cited sources as saying that ByteDance would not sell TikTok's US operations to Oracle or Microsoft, and would not give the source code for the platform to any US firm.

Earlier, people familiar with the matter told Reuters that Byte-Dance had abandoned the sale of TikTok in the US and decided to pursue a partnership with Oracle in hopes of avoiding a US ban threatened by US President Donald Trump. ByteDance would not give the source code for the platform to any US firm, the report said.

ByteDance declined to comment on the CGTN report.

Amid fast-changing developments, Microsoft's exit from the scene came a week before Trump promises to follow through with his plan to ban the app in the US, if its assets there are not sold. Microsoft was the first to confirm it was courting TikTok. It had teamed up with the retailer Walmart to make its bid.

Under ByteDance's latest proposal, Oracle will be the firm's technology partner and assume management of TikTok's US user data, sources told Reuters on Sunday. Oracle is also negotiating taking a stake in TikTok's US operations, they said.

The Trump administration has given a Sept 20 deadline for TikTok's US operations to be sold in order to avoid a ban.

TikTok denies it is a national-security risk, as claimed by the administration, and is suing to scuttle the ban.

Any deal for the TikTok assets must be reviewed by the Committee on Foreign Investment in the US, a group chaired by the Treasury secretary that studies mergers for national-security reasons. The president can approve or deny a transaction recommended by the panel, though Trump has already voiced support for Oracle as a "great company" that could handle the acquisition.

TikTok has had remarkable success in the US. It had 91.9 million monthly active users in the country in June, up from 26.7 million in February last year. The secret of the app's rapid success is its algorithm, which makes the platform so popular and addictive to its users, mostly adolescents.

Chinese Foreign Ministry spokesman Wang Wenbin said on Monday that TikTok's being hunted down is a typical coerced transaction by the US government. He urged Washington to provide an open, fair, just and nondiscriminatory business environment for foreign companies.

"China will firmly support related companies to safeguard their own legitimate rights and interests, and firmly uphold international economic and trade rules," he said at a news conference in Beijing.

'Robbery, bullying'

He said some US politicians, on the one hand, keep talking about fairness and reciprocity and the so-called clean network, but on the other hand, without any solid evidence, abuse US national power under the weakest pretext of national security to suppress non-US companies that have advantages in a certain sector.

"This fully reveals a few US politicians' real intention of robbery and their ugliness of economic bullying," Wang said, adding that China firmly opposes it.

China revised the catalog of technologies prohibited and restricted from export at the end of last month, including algorithm-backed services such as those provided by ByteDance.

The Chinese company then issued a statement that it would "strictly follow" the new technology export rules and handle its "related export businesses".

Unlike other technology companies in Silicon Valley, Oracle has cultivated close ties with the Trump administration. Its founder, Larry Ellison, hosted a fundraiser for Trump this year, and its chief executive, Safra Catz, served on the president's transition team and has frequently visited the White House.

Agencies, Lia Zhuin San Francisco,Mo Jingxiand Cui Haipeiin Beijing contributed to this story.