Chinese Media: Neither Microsoft nor Oracle Closed TikTok Purchase Deal?

Media

Published: September 14, 2020 6:49 am

Chinese state-owned media is notorious for releasing factually flawed stories, so it is hard to tell truth from fiction in its reports. The nation’s television broadcaster, CGTN, reported that neither Microsoft Corp. (NASDAQ: MSFT) nor Oracle Corp. (NYSE: ORCL) won the right to “own” social media company TikTok’s U.S. business, currently owned by China’s ByteDance.

The definition of what Oracle may have bought and what Microsoft did not could simply be a joint venture between Oracle and ByteDance to run TikTok partially in the United States. A deal may have brought ByteDance tens of billions of dollars for the arrangement. Rumors are that the transaction primarily allows Oracle to host TikTok on its cloud computing platform. If so, the term “sale” would be out of place. Oracle is well behind a number of other largest U.S. companies as it pushes into the cloud market. A TikTok deal might help increase the size and visibility of that business.

Specifically, CGTN reported, “ByteDance will not sell TikTok’s U.S. operations to Microsoft or Oracle, nor will the company give the source code to any U.S. buyers, sources said.” If the deal with Oracle is a joint venture, reading between the lines could make the statement partially accurate.

The Chinese TV operation added, “CGTN Digital has learned from sources that ByteDance will also not sell TikTok’s U.S. operations to Oracle.”

What do the Chinese have to win by the report? Perhaps an emphasis on the fact that TikTok’s core technology will stay in China and no U.S. company will have access to it. Earlier in the sales process, the Chinese government said some of TikTok’s technology could not be used outside the country without a license, which it apparently was not prepared to give.

Are reports from traditional Western media an accurate description of the Oracle deal, or are CGTN’s? Maybe both are, a little.

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