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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


Nvidia and ARM

Nvidia is to pay a whopping $40 billion for ARM, the British chip-design giant (your phone almost certainly uses its designs) currently owned by SoftBank. Nvidia is pitching this as a marriage of its A.I. tech and ARM's global ecosystem. News of the sale boosted SoftBank's shares by as much as 10%. Fortune

Amazon expansion

Amazon is hiring 100,000 more workers in the U.S. and Canada, some full-time and some part-time. The jobs will pay at least $15 an hour. Amazon also intends to open 100 more sites this month, including fulfillment centers, sorting centers and delivery stations. Wall Street Journal

Japan PM

The next prime minister of Japan is going to be Yoshihide Suga, who has won the leadership of the conservative Liberal Democratic Party. Suga has spent the last eight years or so essentially acting as chief of staff and spokesman for Shinzo Abe, who is stepping down due to ill health. He is not known to have strong policies of his own, and is likely to continue his predecessor's "Abenomics" economic formula. New York Times

Brexit drama

The British Parliament will today debate and vote on the government's internal market bill, which—unless it is amended—will break international law by allowing the government to bypass the Brexit Withdrawal Agreement that was ratified earlier this year. Every still-alive former British prime minister has concerns about the plan, as does Prime Minister Boris Johnson's own former attorney-general, Geoffrey Cox, who said "no British minister should solemnly undertake to observe treaty obligations with his fingers crossed behind his back." Reuters


Sandvine criticism

The Belarusian government reportedly used technology from U.S. blacklisting firm Sandvine to block much of the Internet during protests last month. Now Senator Dick Durbin is calling for an investigation to see whether PE-owned Sandvine potentially violated U.S. sanctions on Belarus. Bloomberg

China vaccine

China's disease-prevention chief reckons the novel coronavirus is so under-control there that there's no need for a sweeping vaccination program. However, Gao Fu said another major outbreak could justify such a program. "This is an issue of balancing risk and return," he said. China's only new coronavirus cases on Saturday—numbering just 10—were all imported. South China Morning Post

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

Nord Stream 2

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.