| Hi all, it's Zheping in Hong Kong. For those who have been following the TikTok drama for weeks, we're now close to the season finale. In a surprise announcement over the weekend, Microsoft Corp. said it was out of the running to acquire TikTok's U.S. assets. Instead, rival bidder Oracle Corp. is set to be the winner in the deal. TikTok has been the hottest acquisition target in tech since U.S. President Donald Trump forced the app's Chinese owner, ByteDance Ltd., to seek an American suitor to take over its local operations. Microsoft had been viewed as the leading contender and was the first company to confirm its interest back in August. But Microsoft said on Sunday that the Beijing-based company had turned it down. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests," Microsoft said in a statement. Then it added, saltily, "We look forward to seeing how the service evolves in these areas." That left Oracle as the remaining serious contender. But there are still big questions about what a deal with the enterprise database company would look like, who else would be involved and if it could pass muster with Trump. Rather than an outright takeover, Oracle's proposal appears to more closely resemble a corporate restructuring—harkening back to the idea that ByteDance originally proposed, people familiar with the discussions have said, and letting the Chinese app factory keep hold of its prized international asset. One possible outcome: Oracle could take a stake in a newly formed U.S. TikTok business while serving as a tech partner and housing TikTok's American user data on its servers. The terms of the Oracle deal are still evolving, one person said, and some rival bidders haven't given up hope of getting in on the deal. Other investors are said to be looking to team up with Oracle. And even Walmart Inc., which had previously been cooperating with Microsoft, said it's still in talks with ByteDance and other interested parties. "Walmart continues to have an interest in a TikTok investment," the retail giant said in a statement on Sunday. "We know that any approved deal must satisfy all regulatory and national security concerns." Indeed, there's plenty of regulatory concern to go around. Beyond Trump's requirements, China's government made its 11th-hour entry into the TikTok saga at the end of August, putting new restrictions on the export of artificial intelligence know-how from China, including the personalized recommendations that lie at the heart of TikTok's addictiveness. A deal without TikTok's algorithms, as my colleague put it, would be like buying KFC without its 11 secret herbs and spices. If Oracle and its potential partners in a consortium do want that tech, ByteDance then needs to get a green light from Beijing, which has the intent to push finalization of any agreement beyond the U.S. elections in November. Trump, meanwhile, has said he won't extend the deadline for the U.S. TikTok sale, stressing that he would ban the app if there's not a deal in place by Sept. 15. As both governments and companies tussle over the details, there's still a significant chance for the whole multibillion-dollar enterprise to get taken off the air in the U.S. —Zheping Huang | 
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