Clock runs out on sale of TikTok to Austin-based tech company
This news may have some people in Austin “shook,” as they say on TikTok: Software giant Oracle and retail powerhouse Walmart have indefinitely dropped plans to buy the U.S. arm of the video-sharing app.
Not only is this a major (though not entirely unexpected) development for Austin-based Oracle, but it also may affect TikTok’s Austin workforce.
Last August, TikTok laid out plans to roughly double its Austin headcount from close to 100 to around 200, and to eventually add hundreds of employees here. Around the same time, speculation surfaced that if TikTok’s U.S. operations were sold to Oracle and Walmart or other buyers, Austin might become the headquarters of the newly configured U.S. business.
As of February 11, TikTok listed 65 job openings in Austin on its website.
A spokeswoman for TikTok couldn’t be reached for comment. Oracle and Walmart haven’t publicly commented about the collapse of the TikTok deal.
Citing national security concerns, the Trump administration had tried to force the sale of TikTok, which is owned by Beijing-based ByteDance, to an American company, according to NPR. If no deal was reached, Trump had threatened to effectively blacklist TikTok in the U.S. After the Trump administration made that move, TikTok said the action jeopardized new jobs in Austin and elsewhere in the U.S.
Oracle and Walmart had been cobbling together a deal to buy TikTok’s U.S. operations, but a final deal never materialized, NPR says. Now, the potential acquisition has been shelved. Sources tell NPR that TikTok was hesitant to give up even partial control of its platform.
The shelving of the TikTok deal comes as the Biden administration undertakes a review of security risks posed by collection of Americans’ data by Chinese tech companies, including ByteDance, according to The Wall Street Journal. The WSJ broke the news February 10 about the indefinite halt to the TikTok acquisition.
According to the WSJ, the switchover from the Trump administration to the Biden administration means the app “no longer faces the threat of imminent shutdown” in the U.S. Therefore, ByteDance has much less of an incentive to sell the U.S. component of TikTok, at least for the time being.