Microsoft Says Its Bid for TikTok Was Rejected in U.S.-China Standoff


WASHINGTON — The proprietor of the Chinese app TikTok rejected a suggestion on Sunday from Microsoft to take over the agency’s U.S. operations, Microsoft mentioned, as time runs out on an govt order from President Trump threatening to ban the favored app except its American operations are offered.

Microsoft was seen because the American know-how firm with the deepest pockets to purchase TikTok’s U.S. operations from its father or mother firm, ByteDance, and with the best capability to handle nationwide safety considerations that led to Mr. Trump’s order. The transfer leaves Oracle — one of many few Silicon Valley corporations to publicly ally with Mr. Trump — as the only real publicly recognized remaining bidder for TikTok.

ByteDance has indicated that Oracle could be its “technology partner,” nevertheless it was unclear whether or not that meant it could additionally take a majority possession stake of the app, based on individuals concerned in the negotiations.

“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Microsoft mentioned in a press release. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

Oracle has said nothing publicly about what it would do with TikTok’s underlying technology, which is written by a Chinese engineering team in Beijing — and which Secretary of State Mike Pompeo has charged is answerable to Chinese intelligence agencies. That is a major concern of American intelligence agencies, led by the National Security Agency and United States Cyber Command, which warned internally that whoever controls the computer code could channel — or censor — a range of politically sensitive information to specific users.

Oracle was also poised to provide the administration with a system earlier this year to help with a planned study that would have enabled the wide release of the malaria drug hydroxychloroquine to treat Covid-19. While doctors had warned the drug could have dangerous side effects, Mr. Trump had promoted its possible use to treat patients infected by the coronavirus.

Oracle’s relationship with the administration has drawn scrutiny. In August, a Department of Labor whistle-blower said that Mr. Trump’s labor secretary, Eugene Scalia, had intervened in a pay discrimination case involving the company.

On a call to discuss Oracle’s earnings last week, Ms. Catz preemptively told analysts that she and Mr. Ellison would not discuss reports about their bid for TikTok.

The rise of TikTok in the United States has been remarkably rapid; it has taken off in just the past two years. ByteDance, founded in 2012, has raised billions of dollars in funding, valuing it at $100 billion, according to PitchBook, which tracks private companies. Its investors include Tiger Global Management, KKR, NEA, SoftBank’s Vision Fund and GGV Capital.

In July, as pressure from the U.S. government escalated, ByteDance began discussions with investors to carve out TikTok.

But the deal quickly become a free-for-all with bids from various corporations and investment entities around the world and new demands from the U.S. and Chinese governments.

As the deal progressed, two of ByteDance’s largest backers, Sequoia Capital and General Atlantic, have sought to retain their holdings in its valuable subsidiary while saving TikTok from a ban in the United States. Both firms are represented on ByteDance’s board of directors.

In late August the firms teamed up with Oracle to bid against Microsoft. Microsoft, meanwhile, teamed up with Walmart to make its bid.

David E. Sanger and David McCabe reported from Washington; Erin Griffith reported from San Francisco.



Source link Nytimes.com

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