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Will Oracle’s reported TikTok deal satisfy Trump?

September 14, 2020, 10:41 AM UTC

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Good morning. David Meyer here in Berlin, filling in for Alan.

The TikTok conundrum may be about to be solved—or not.

Here’s what can be said for certain at the time of writing. According to multiple outlets, Oracle is the “winning bidder” for a deal with TikTok owner ByteDance, regarding the future of the increasingly popular short-video network. Microsoft says ByteDance has rejected its offer to buy TikTok’s U.S. operations, while Walmart, which was to have been Microsoft’s partner in this venture, says it “continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties.”

What we don’t know is what sort of deal Oracle is getting here—which rather dictates what happens next.

China’s recently-revised export-control list does not allow ByteDance to sell off TikTok’s desirable content-suggestion algorithms without permission, which is presumably why the Wall Street Journal reports that Oracle is to become TikTok’s “trusted tech partner” in the U.S., rather than the purchaser of its U.S. operations. After all, without that secret sauce, an outright buy becomes a lot less desirable.

But without TikTok’s U.S. operations being sold off, will the White House be satisfied?

President Trump is adamant that TikTok will be shuttered in the U.S. unless an American company buys it by tomorrow (according to Trump last week) or by Sunday (according to Trump’s executive order, signed last month). Oracle may have solid connections to Trump, with co-founder Larry Ellison and CEO Safra Catz both supporters of the President, but a “tech partnership” could be a far cry from the desired sale, depending on the terms.

Former Facebook security chief Alex Stamos argued on Twitter that “a deal where Oracle takes over hosting [TikTok’s U.S. services] without source code and significant operational changes would not address any of the legitimate concerns about TikTok, and the White House accepting such a deal would demonstrate that this exercise was pure grift.”

Hopefully that’s not the case, because it would turn what is already a deeply weird situation—up-and-coming tech firms should not be pawns on the geopolitical chessboard—into a terrible precedent. But if such fears are unfounded, will Beijing stand for the deal?

Let’s stay tuned for the details of that agreement. More news below.

David Meyer
@superglaze

david.meyer@fortune.com

TOP NEWS

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Amazon expansion

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Israeli lockdown

Israel will from Friday impose a new three-week national lockdown, in which people will need to stay within 500 meters of their homes except when traveling to work, and shops (except for supermarkets and pharmacies) will be closed to the public. As the restrictions will overlap with important Jewish festivals, the ultra-Orthodox housing minister Yaakov Litzman has resigned in protest and threatened to pull his party from the ruling coalition. BBC

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Germany is considering killing the controversial Nord Stream 2 Russia-to-Germany gas pipeline, as retribution for Moscow's refusal to help the investigation into the Novichok poisoning of opposition leader Alexei Navalny. But how could Germany do this without risking enormous damages claims or breaking EU law? Politico has an interesting rundown of six potential options, and the fallout they might cause. Politico

This edition of CEO Daily was edited by David Meyer.