Reuters said the Chinese company, ByteDance, abandoned the idea of selling the TikTok app in the United States on Sunday, seeking a partnership with Oracle, which it hopes to spare an American ban, while securing approval from the Chinese government. According to informed sources.
The Beijing-based company was in talks to convert the US business of TikTok to an Oracle or Microsoft-led coalition after US President Donald Trump ordered the sale of the app's operations last month and threatened to close the popular short video app in the United States.
US officials expressed concerns that user information could be transferred to the Communist government in China.
At a time, "TikTok" - which has up to 100 million US users - said that it would not comply with any request to share such data with the Chinese authorities.
The sales negotiations have been turned upside down because China updated its export control rules late last month, which could prevent the sale of the "Tik Tok" algorithm to a foreign buyer.
Reuters reported last week that the Chinese government preferred to shut down TikTok in the United States than to force it to sell the app.
The sources said that under the proposed agreement, Oracle will be the technology partner of the "ByteDance" company and will manage the data of TikTok users in the United States.
She added that Oracle is also negotiating the purchase of a stake in US "TikTok" operations.
One of the sources said that some of ByteDance's big backers, including the investment companies General Atlantic and Sequoia, would also get minority stakes in US TikTok operations under the proposed deal.
It is unclear whether Trump, who wants a US tech company to own most of its TikTok operations in the United States, will agree to the proposed deal.
And oversee the talks between "ByteDance" and Oracle, the Committee on Foreign Investment in the United States, "CFIUS" (CFIUS), which is a government reviewing deals for potential national security risks.
ByteDance and Oracle did not immediately respond to Reuters' requests for comment.
The White House also declined to comment.
Oracle chief Larry Ellison is one of the few tech supporters of Trump (Reuters)
Oracle chief Larry Ellison is one of the few tech supporters of Trump.
The company has great technical prowess in handling and protecting data, but has no experience with social media.
Its customers consist of companies, not consumers.
TikTok user data is currently stored in Alphabet's GOOGLE servers.
Earlier on Sunday, Microsoft said that ByteDance had informed it that it would not sell its Tik Tok operations in the United States.
Wallmart - which joined Microsoft in its bid to buy TikTok - said on Sunday that it was still interested in investing in TikTok and that it would hold further discussions with ByteDance's leadership and other stakeholders.
"We know that any deal that has been approved must satisfy all regulatory and national security concerns," Walmart said.
The differences of America and China
With the deterioration of relations between the United States and China over trade, Hong Kong's autonomy, cybersecurity and the spread of the new Corona virus, TikTok has emerged as a hotspot in the conflict between the two largest economies in the world.
Trump signed two executive orders last month targeting "TikTok" and "ByteDance", the first that US companies are banned from doing business with, and they are scheduled to go into effect on September 20.
The second requires ByteDance to sell TikTok by November 12th due to US security concerns.
If Trump agrees to ByteDance's proposed deal structure with Oracle, he will have to cancel his order that specifically calls for a TikTok ban.
As many as 40% of Americans support Trump's threat to ban TikTok if it is not sold to an American buyer, according to a national poll conducted by Reuters / Ipsos last month.
Among Trump's Republican Party, 69% said they support the president's orders even though only 32% said they were aware of the implementation.
The White House has intensified its efforts to remove what it considers "untrusted" Chinese applications from US digital networks.
Unlike TikTok, Trump has also issued an order prohibiting transactions with the Chinese company Tencent.