ByteDance founder and CEO Yiming Zhang’s choice to drop his pursuit of a sale of TikTok’s U.S. operations to Microsoft Corp in favor of a partnership with Oracle Corp was the end result of weeks of strain from China’s authorities and the Beijing-based agency’s buyers, in line with individuals conversant in the deliberations.
China’s opposition to a compelled sale of TikTok, in addition to considerations by main ByteDance backers comparable to Sequoia and Normal Atlantic over the monetary hit of promoting the favored short-video app in the US for lower than what it’s value, led Zhang to go for the sale of solely a stake to Oracle, quite than an outright divestment, the sources stated.
It’s a dangerous technique. President Donald Trump has made it clear he needs to see an outright sale of TikTok to a U.S. know-how firm, amid considerations by nationwide safety officers that U.S. consumer knowledge might be handed on to China’s Communist Get together authorities. He has threatened to ban TikTok in the US as early as Sept. 20 if ByteDance doesn’t comply.
Microsoft executives grew pissed off over the course of the previous week as ByteDance grew to become unresponsive to the Redmond, Washington-based firm’s $20 billion-plus bid for TikTok’s U.S. enterprise, three of the sources stated. The bid additionally allowed for future funds based mostly on TikTok’s efficiency, one of many sources added.