Microsoft Reenters Negotiations to Acquire TikTok, Partnering with Oracle

Is it 2025 already? It seems like it, and Microsoft is once again in the spotlight as a potential buyer for TikTok.

For those out of the loop, last year, Congress in the U.S. passed a law requiring TikTok, which is based in China, to either sell its U.S. operations or shut them down completely. President Biden chose not to veto this bill, which resulted in it becoming law. TikTok initially refused to comply, causing the app to briefly go offline last Sunday. Interestingly, it was swiftly back online within hours, accompanied by a pop-up message expressing gratitude to incoming President Trump for granting a reprieve.

President Trump has given TikTok a sort of grace period of 90 days. Yet, despite this temporary relief, both Google Play and Apple’s App Store are standing their ground and not reinstating the app due to its legal entanglements. This means TikTok might still need to either shut down or find a new owner in the U.S. shortly.

According to NPR, with insights from The Verge, Microsoft appears to be stepping up as a potential buyer for TikTok once more.

Globally, TikTok has faced backlash over its addictive algorithm, which critics say creates echo chambers and fosters various kinds of extreme views. The U.S. has flagged it as a national security risk due to its ties with its parent company, Bytedance, and the Chinese government. The fear is that TikTok could be used for propaganda or to monitor American citizens. Over in Europe, the app’s influence on the surge of extremist groups and its role in disseminating pro-Russian content are currently under EU investigation.

Rumors indicate the U.S. government may be considering a strategy where Oracle would take over TikTok’s worldwide operations, with Bytedance retaining a minority position. Microsoft is purportedly engaged in these discussions as well, although it’s not clear to what extent. All the companies in the loop are staying tight-lipped for now.

In the realm of social media, Facebook and Instagram are with Meta, Google has YouTube, Amazon boasts Twitch, while Microsoft holds… LinkedIn.

Now, LinkedIn is undoubtedly a successful platform, but its focus is more professional than cultural. If Microsoft were to either own or have significant sway over a platform like TikTok, it could propel their consumer technology — think Windows, Surface, and Xbox — to new heights. Just imagine Xbox teaming up with TikTok, or Windows featuring a built-in video editing tool inspired by TikTok’s style. Admittedly, there were similar high hopes when Microsoft acquired Skype, and we all saw how that unfolded.

It seems unlikely Microsoft will play a major role in actually owning TikTok, even though TikTok is one of the biggest clients of Microsoft’s Azure AI services. Many of TikTok’s advanced machine learning functionalities rely on Azure, though most of the app is hosted on Oracle’s cloud. So, if I were to bet, Microsoft’s role likely revolves around this Azure AI partnership.

But what if they’re gearing up for something more?