US tech firm Oracle has confirmed that TikTok’s owner has formally proposed it become a “trusted technology partner” to the video-sharing app.
Trump has cited national security concerns, suggesting users’ data could be accessed by Beijing under current arrangements.
Microsoft’s alternative bid to take over TikTok’s US operations was rejected by Chinese owner ByteDance, with database specialist Oracle securing the deal.
Full details of the tie-up have yet to be disclosed, but the aim is to avert President Trump’s threat to shut down the Chinese-owned service in the US.
ByteDance had been in talks to either sell to Oracle or a consortium led by Microsoft, and including retail giant Walmart.
But those talks were thrown off track after China updated export control rules last month – giving it a say over the transfer of TikTok’s algorithm to a foreign buyer.
The Chinese firm said the cloud computing specialist Oracle would serve as TikTok’s “trusted technology provider.”
25,000 new jobs?
The Reuters news agency, citing sources, reported that TikTok would create up to 25,000 new jobs in the US should the White House agree to the partnership.
TikTok is best known for short video clips that go viral on social media, especially among young people, but American officials are worried that user information could find its way into the hands of the Chinese government.
The app has said it would never share such data with Chinese authorities.
It was not yet clear whether Trump, who favours an American tech firm owning a majority of TikTok in the US, would approve the deal.
Oracle’s chairman, the billionaire Larry Ellison, is a supporter of Mr Trump and in February held a fundraiser at his California home to aid the Republican leader’s re-election campaign.
‘Let TikTok do what it does best’
Yuval Ben-Itzhak, CEO, Socialbakers, said: “The news that Oracle will become a “trusted tech partner” to TikTok’s US operations certainly looks very promising at a first glance. Having Oracle’s expertise in cloud and data technologies at an enterprise scale can certainly support TikTok’s backend needs and phenomenal growth.
“The only risk that such a partnership may present would be if Oracle tries to change TikTok’s DNA into a traditional operation, instead of focusing its efforts on building out the technology infrastructure and leaving the TikTok business to do what it does best, acquire and engage users authentically at scale.”