Oracle Corp. (NYSE:ORCL) is set to take over the U.S. operations of video-sharing app TikTok, according to the Wall Street Journal.
The Redwood City, California-based company beat out fellow tech rival Microsoft Corp. (NASDAQ:MSFT) in a bidding war that would reportedly not result in an outright sale.
The back-and-forth came about after U.S. Presient Donald Trump threatened to ban the app if a deal wasn't reached by Sept. 20.
Per the WSJ, Oracle is expected to be announced as TikTok’s “trusted tech partner” in the U.S.
TikTok touts approximately 100 million U.S. monthly active users. That's up abut 800% percent from Jan. 2018.
The service, owned by the Chinese technology giant ByteDance, claims to have been downloaded some 2 billion times globally. About 50 million users are active on the app each day.
TikTok users have wielded the platform to create viral content and even achieve fame. Among the app's most popular users are Charli D'Amelio, Addison Rae, Chase Hudson, Dixie D'Amelio and Avani Gregg.
The app, popular among Gen Z, first drew the ire of Trump back in June in the weeks leading up to a political rally in Tulsa, Oklahoma. The Trump campaign said more than 1 million people expressed interest online to attend, but only about 6,000 people showed up after TikTok users apparently created phony registrations.
Why The Oracle Deal Matters
Trump issued an executive order to ban TikTok from the U.S. market citing national security concerns regarding data security and data privacy.
If the video-sharing app was sold to a U.S. company, it could avoid getting banned. Microsoft was believed to be the buyer, but confirmed that a deal would not take place.
“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Microsoft said. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests. To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”