16 Sep 2020

PRESIDENT DONALD TRUMP’S demand in August that ByteDance sell TikTok to an American firm set off a race for the Chinese firm’s trophy asset. Jockeying for the popular short-video app’s American business, with 100m users, was fierce. Microsoft seemed ahead, and got a late fillip when Walmart joined its bid. But the software-and-grocery duo was pipped to the post. On September 14th Oracle, a database firm, signalled it had brokered a deal.

Oracle’s clinching argument in its favour seems to have been its rapport with the White House. Larry Ellison, Oracle’s founder and chairman, hosted a fund-raiser for Mr Trump. The firm’s boss, Safra Catz, served on his transition team in 2016. “She lobbied a lot in Washington and she did a great job,” says a ByteDance investor. Oracle also enlisted the firm’s powerful American venture-capital backers, including Sequoia Capital and General Atlantic.

Details of the planned transaction are still being ironed out. But it looks like a U-turn for Mr Trump, who for months seemed hellbent on a full sale of TikTok by ByteDance—which the Oracle deal is not. His stated reasons concerned national security: the risk of TikTok handing Americans’ data over to China’s Communist Party and of running disinformation campaigns on behalf of China. (TikTok insisted it would never hand users’ data...

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This content was originally published by The Economist: Business. Original publishers retain all rights. It appears here for a limited time before automated archiving. By The Economist: Business

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