(Bloomberg) — Oracle Corp.’s negotiations for TikTok’s U.S. operations have intensified in recent days in a sign that the software maker is gaining the upper hand over its main rival, Microsoft Corp., people with knowledge of the matter said.
A decision could come in the next couple of days, one of the people said. Early offers from both parties valued the U.S. business at about $25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, and the terms may have also changed, the people said, asking not to be identified as the information isn’t public.
Microsoft, which is working with Walmart Inc., had been seen as the more likely winner, but its talks have cooled, one person said. Microsoft hasn’t been asked to make revisions to its initial offer in the face of recent signs of opposition to a deal from Chinese government officials, the person added.
TikTok, owned by China’s ByteDance Ltd., is fielding bids for its U.S. operations under orders by the Trump administration, which has said the company’s Chinese ownership threatens national security. TikTok intends to bring a proposal to the White House ahead of a mid-September deadline imposed by U.S. President Donald Trump, a person with knowledge of the matter said Friday, and any bid will also need the blessing of government officials in Beijing.
The terms being discussed would be more of a corporate restructuring rather than outright sale, one person said. This structure harkens back to Bytedance’s original intentions earlier in the summer to sell a partial stake in TikTok’s operations or restructure the company with a global headquarters and board of directors outside of China. It’s unclear if that will pass muster with certain members of the Trump administration who are more hawkish about China.
Representatives for TikTok and Microsoft declined to comment, and Oracle didn’t immediately respond to a request for comment outside normal business hours. Axios reported earlier on Sunday that Oracle had leapfrogged Microsoft as the most likely buyer of TikTok’s U.S. operations.
Owning TikTok would give the winning bidder access to an addictive video-sharing app used by more than 100 million people in the U.S. The site, which lets people record and edit short video clips ranging from lighthearted lipsyncs to more serious political statements, has gained popularity during the global pandemic that’s kept many people cooped up indoors.
For Oracle, TikTok is less an obvious fit, but makes sense in light of the software company’s desire to build up its cloud-computing and consumer-data businesses. It also resonates with Oracle’s close ties to Trump and Chairman Larry Ellison’s cheerleading for American tech interests. Oracle is working with venture capital firm Sequoia Capital, a ByteDance investor, in its pursuit of TikTok.
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