The past couple of hours have generated some amazing news from the technology sector: Oracle has beaten Microsoft to win a deal with ByteDance that will enable it to partner with TikTok in the U.S. The news is a shock for Microsoft, which had partnered with Walmart to create a potential deal with TikTok. According to CNBC, however, Walmart is still looking for ways to partner with TikTok
And there’s more news: Nvidia is buying Arm Holdings in what would be the largest deal in the chip industry. The acquisition may signal a major shift in the semiconductor industry, according to an article on today’s Wall Street Journal.
“Oracle’s stock surged Monday after reports that China-based ByteDance has chosen it to be TikTok’s U.S. technology partner,” write Julia Boorstin and Jason Novet of CNBC. “A person familiar with the discussions told CNBC on Sunday that ByteDance picked the Oracle to be the U.S. partner of the popular social video app. Oracle also will take a significant stake in the business, the person said. Earlier Sunday, Microsoft said ByteDance had chosen not to sell it TikTok’s U.S. assets. Oracle’s stock jumped 10% in Monday’s premarket.”
Meanwhile, Nvidia is moving forward with a deal to acquire Arm Holdings, the British semiconductor and software design company. “Nvidia has agreed to buy the U.K.-based chip design house Arm Holdings from SoftBank Group for about $40 billion in cash, stock, and future considerations,” writes Eric J. Savitz of Barron’s. “It’s the biggest acquisition in the history of the semiconductor industry and a significant victory for SoftBank and its founder and CEO Masayoushi Son, which bought Arm for $32 billion in 2016.”
The Nvidia deal reflects well on Son, whose apparently risky bets had been questioned by many analysts. Microsoft’s loss to Oracle is puzzling, on many levels, and will undoubtedly be the topic of commentary in the weeks ahead.
“Microsoft’s failure to buy TikTok amounts to a symbolic loss for Satya Nadella, who took over Microsoft from Steve Ballmer in 2014. Under Ballmer, Microsoft had sought to buy Yahoo in 2008 but ultimately withdrew the bid after Yahoo rejected the offer, even as Microsoft increased the amount it was willing to pay,” according to CNBC.
There is also a political dimension to the TikTok deal. “For months, the Trump administration has been pressuring TikTok to divorce itself from its Beijing parent company, ByteDance, as officials in Washington fear the Chinese government could use the video app as a tool to spy on Americans,” according to a report today by Bobby Allyn of NPR. “Trump signed an executive order last month that makes it illegal for U.S. citizens to do business with ByteDance or any of its subsidiaries starting on Sept. 20. In a separate action, Trump ordered that TikTok sell off its U.S. operations by Nov. 12.”
In the NPR article, Chinese tech giant ByteDance said it will not be selling its video-sharing app TikTok to either Microsoft or Oracle, according to China state TV.
The size and impact of these deals cannot be underestimated. From my perspective, this is a truly exciting moment for our industry, no matter which companies you are cheering for.
I have often said and written that now is the best time to be a technology leader. It’s especially gratifying to know that our sector is driving the rest of the economy by providing a continuous and unparalleled torrent of innovation, talent, vision, productivity and leadership.
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