President Trump said Tuesday (Sept. 15) that he will soon decide whether to approve a partnership agreement between Oracle Corp. and TikTok, the overseas version of Shakespeare, which is owned by China’s Byte Jumping. There have been reports that TikTok will be headquartered in the United States for global operations, but that Byte Jumping will still have primary ownership of TikTok and an important “algorithm” technology.
I hear they’re very close to an agreement,” Trump said Tuesday afternoon at the White House. I’ll be working with (Oracle chairman) Larry Ellison and Oracle on this TikTok agreement.”
Trump issued an executive order last month that required BytePop to divest TikTok’s U.S. operations, citing data privacy and national security concerns for U.S. citizens. Microsoft Corp. in the U.S. was previously interested in acquiring ByteTok, but talks broke down late last week. Oracle will replace Microsoft as ByteHop’s “trusted technology provider,” but the two will not merge in an acquisition.
Following the executive order, the Chinese government on August 28 issued new regulations on technology export controls, specifying that “personalized push messaging service technology based on data analytics” be included in the scope of control. This is considered to be a direct response to the U.S. company’s intention to acquire TikTok, and is one of the main reasons why Microsoft’s acquisition plan fell through.
According to the Financial Times, ByteDance will set up a new headquarters in the United States dedicated to TikTok’s global business with a majority stake, while Oracle will manage TikTok’s U.S. user data with a minority stake.
According to several media reports, the agreement will not require Byte Jumping to cede TikTok’s key algorithms. The algorithm determines how the social media platform interacts with users, and TikTok uses the algorithm to determine user preferences and push content of interest to users.
TikTok is an overseas version of the Chinese video social media platform Shakespeare, and users in mainland China cannot use TikTok in China.
Some analysts believe that if Oracle’s partnership arrangement with TikTok is approved by the White House and the Committee on Foreign Investment in the United States (CFIUS), it will not fully address the data security and national security concerns previously raised by the White House.
A Washington think tank expert on technology and national security told VOA that he is concerned about the details of the agreement, which stipulates who owns the data and algorithms. The expert, who requested anonymity, said, “The protocol details ultimately determine who controls the data and what kind of information you gather from the habits of the user using the application. So if Oracle can’t control that, to me that means that those concerns that the U.S. government has raised with TikTok have not been addressed.”
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