Washington —
The terms being discussed with Oracle are still evolving, one of the people said. But one of the options is that Oracle could take a stake of a newly formed US business while serving as TikTok’s US technology partner and housing the video app’s data in Oracle’s cloud servers. Early offers from both parties valued the US business at about $25bn, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, said people with knowledge of the matter.
“If you say this is a hostile takeover, that may not be nice for both parties,” she said. “But if you frame it as like restructuring or spin-off,” that’s more acceptable to the two governments. The app, which lets people record and edit short video clips ranging from lighthearted lip-syncs to more serious political statements, gained popularity during the global pandemic that has kept many people cooped up indoors. TikTok’s loyal following of more than a 100-million in the US helps explain the strong interest among early suitors from Microsoft to private equity giants such as Sequoia and General Atlantic.
If the Chinese company is able to get a deal through the White House that doesn’t involve an outright, forced sale, it would mark a major feat for Bytedance founder Zhang Yiming, who has been reluctant to hand over such a prized asset. But critics question how a technology partnership with Oracle, rather than an outright sale, would assuage the White House’s national security concerns.