Remember that time Donald Trump’s administration tried to strong-arm Beijing-based ByteDance into selling TikTok, its wildly popular music app, to a U.S. company? The CEO of Microsoft does, and he’d prefer that you recall it as a zany little corporate adventure instead.
Back in August 2020, the Trump administration began putting the screws to TikTok, invoking emergency powers to demand that ByteDance sell off a majority stake in the app or else face a ban on distribution (such as via Google Play or Apple’s App Store) across the U.S. in September. The White House justified the matter as a crackdown on the supposed espionage threat posed by a tech company tied to a nefarious Communist adversary.
Yet it quickly became clear Trump viewed the matter as a quid pro quo with whichever U.S. company would get a slice of the juicy app, arguing that because the feds were forcing the deal, the Treasury should get a kickback. It certainly also seemed suspicious the then-president also had a grudge against the app courtesy of TikTok teens who reportedly reserved thousands of tickets for a Trump rally in Tulsa in June 2020 before not showing up. The event actually got a pathetic turnout, humiliating re-election campaign manager Brad Parscale, who had claimed 1.2 million attendees had registered. TikTok was eventually able to fend off the threatened ban in the courts and avoided any sale, but not before a series of potential bidders had lined up, including Microsoft, which later lost to a joint bid from Oracle and Walmart.
On Monday, Satya Nadella spoke at the Code 2021 Conference in Beverly Hills, California, where he said that he remained baffled by the deal but defended Microsoft’s proposal to acquire a stake of TikTok. According to the Verge, Nadella called the de facto extortion attempt the “strangest thing I’ve ever sort of worked on.”
Nadella admitted that he “was kind of intrigued by it… and then I guess the rest is history.” He also insisted that TikTok was the one who wanted to partner with Microsoft and not the other way around.
According to CNBC, Nadella continued, “First of all, you’ve got to remember, TikTok came to us, we didn’t go to TikTok. TikTok was caught in between a lot of issues that they were having across two capitals, and they wanted to partner.” TikTok wanted a security-focused cloud computing provider, he added, “But I was pretty intrigued. And let’s say it’s a great property, obviously.”
This is a bit like saying the hostage wanted to be ransomed, but OK.
Nadella continued that Microsoft was effectively turned off of any potential deal by the “particular” perspective of the Trump administration.
“President Trump, I think he had sort of a particular point of view on what he was trying to get done there,” Nadella told the audience. “Then just dropped off. It was interesting. There was a period of time that I felt that the USG had some particular set of requirements, and then they just disappeared.”
In fact, what really happened was that Trump went off the rails, backtracked, and claimed he’d rather ban the app than continue pushing a deal. That busted Microsoft’s bid but opened the door for Oracle, whose upper management is conveniently stacked with Trump cronies and certainly saw value in extorting what had become one of the most popular social media apps in the country. It probably didn’t help that Microsoft employees reportedly urged management to walk away from a TikTok deal, with an internal Yammer poll showing just 18% support. Some Microsoft workers said pursuing the venture would be unethical, while founder Bill Gates told Wired the deal could be a “poison chalice” and “having Trump kill off the only competitor, it’s pretty bizarre.”
The actual bid Oracle and Walmart ended up putting forward didn’t resemble the Trump administration’s initial demands at all, as it would only become a minority stakeholder and “trusted technology provider.” Oracle never really clarified how any of this would resolve the Trump administration’s stated espionage concerns, as opposed to just being a shakedown of ByteDance’s golden calf.
Then the Trump administration effectively seemed to lose interest in the whole thing, not actually making good on the ban threat and extending the September deadline several times. Meanwhile, the U.S. government suffered a series of humiliating losses in court that made it clear that if the Commerce Department actually tried to ban TikTok, it might be reversed by a federal judge. Joe Biden later effectively killed the deal (technically, it’s shelved indefinitely). That means neither Oracle nor Walmart ended up getting their piece of mammon, let alone Microsoft.
According to CNBC, Nadella maintained that Microsoft would have been a good partner for TikTok, as it already owns a handful of other social apps: “You better know something about running social media, which we know with either through Xbox Live or LinkedIn.” But he told attendees he’s “happy with what I have.”
On Monday, TikTok surpassed one billion users.