With the News Breaking Sunday the 13th That TikTok Both Rejected Microsoft’s Bid, And Accepted Oracle’s Offer, The World Waited To See Just How This Deal Would Play Out. On Monday It Was Announced It Was Not A Sale But That Oracle Would Be TikTok’s American “Technology Partner”.
A Term Sheet That Does Not Meet, Either The Standards Of The Executive Order, Nor Does It Match The National Security Concerns TikTok Poses.
By Ryan Carroll, Managing Editor.
Technology “Partner” – No Sale!
According to Variety Oracle will become TikTok’s “technology partner / provider” and TikTok will not outright sell its assets to Oracle, but instead Oracle will manage its operations here in a unspecified manner.
As Oracle is one of the leading Silicon Valley cloud providers it would be apt to manage its data servers, though TikTok manages all its worldwide backup user data on servers in Singapore, which it’s parent company ByteDance is investing billions into Singapore, so there is this concern.
As apart of the deal, ByteDance VC investors General Atlantic and Sequoia Capital, will receive ownership stakes in TikTok according to the WSJ. Their involvement, along with Oracle Founder Larry Ellison being a Trump supporter, friend, and fundraiser, may have been part of the equation to how Oracle beat out Microsoft to become TikTok’s American “partners.”
One major hurdle still faces Oracle and TikTok and that is the volatile Trump Administration:
Earlier, Mnuchin said that the Treasury-led Committee on Foreign Investment in the U.S. (CFIUS) will review Oracle’s proposal this week. “We will be reviewing that at the CFIUS committee this week and then will be making a recommendation to the president and reviewing it with [Trump],” Mnuchin said on CNBC. “From our standpoint, we’ll need to make sure that the code is, one, secure, Americans’ data is secure, that the phones are secure and we’ll be looking to have discussions with Oracle over the next few days with our technical teams.”Variety
The Great American Employer
Mnuchin even stated in the WSJ that the Oracle deal would result in TikTok creating 20,000 new jobs as they would be building a new global headquarters here. A claim that TikTok and ByteDance have continually made in every location they make inroads into, but one that this analysts has had previously been informed that many of those jobs will only be temporary, and would not last beyond one year from insider sources.
From other sources TikTok’s previous hiring of 20,000 employees internationally resulted in them hiring only 5% in their U.S. hires, but this may be due to the coronavirus pandemic.
The Algorithm Stays In China’s Hands “For You”
Much has been talked about TikTok’s user data and its servers here in the U.S. and the back-up in Singapore, but as in the last couple of weeks with Beijing stepping in abruptly to change its laws so that ByteDance would not be allowed to sell it A.I. without China’s permission. It is abundantly clear that TikTok’s security threat lies among its algorithms that power its artificial intelligence.
TikTok’s “For You” feature is what separates it from its competitors such as YouTube and Instagram, in shuffling random, very addictive short videos to your feed, and recently they have opened up their own “Transparency Center” which one of The Verge journalist took a virtual Zoom tour on.
He called it a “noble effort” but I will tell you what it really is. All the “Transparaceny Center” tells you is, TikTok’s algorithm is different from YouTube’s, Twitter’s, Instram’s, or Facebook’s, and that it is not any more transparent or non-addictive.
As we reported in our previous article on TikTok As A Future Security Threat we looked at the recent U.S. District Court case in Illinois brought by dozens of California families alleging, that the video-app was collecting facial and other data on their teen children and sending it back to China.
Brought on under the Illinois law, known as the Biometric Information Privacy Act and first reported by NPR. This form of data tracking can only be done by sophisticated algorithms such as artificial intelligence, and if only the data servers and users are operated by the U.S. “technology partner”. Then the original threat that TikTok posed here in the United States still stands even with a deal made with Oracle and the two American venture capital partners.
Stay Tuned China Watchers!
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About the Author
Born and raised in the Missouri-Ozarks Ryan studied Film Production, and East Asian Culture, at the University of Kansas where he was a UGRA recipient that led him on a seven-year long, Journey From the West, to China. Where he worked with Warner Brothers, the China Film Group Corp. and the National Bureau of Statistics of China. Before returning to the States, where he specializes in Chinese Anime & Comics, China’s Box-Office, and Chinese entertainment-tech industries. He has a dog in China, Abigail, and a dog in the Arkansas-Ozarks, King Blue, who help ease his anxiety of suffering from the “Two-Dimensional Complex” that is trying to understand the Culture Industry landscapes of the Middle Kingdom.