(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

SAN FRANCISCO (Reuters Breakingviews) - More twists await a tie-up between video-sharing service TikTok and Oracle. Chinese owner ByteDance has chosen Larry Ellison’s firm as the “trusted tech partner” for its overseas short-video app unit but any deal that stops short of a full sale will raise national security worries in Washington, D.C. With anti-China rhetoric raging and an upcoming election, Oracle’s ties to U.S. President Donald Trump aren’t a cure-all.

TikTok’s fate has become a viral drama. In August, Trump issued orders essentially banning the app, which has 100 million users in the United States, and requiring ByteDance to divest of TikTok’s assets there. American lawmakers have cited concerns about Chinese access to the app’s data. Microsoft and Oracle were among the interested parties. But Microsoft said on Sunday ByteDance informed the firm it was out of the running.

Oracle presented an ideal solution for ByteDance to avoid a full sale, according to Reuters and The Wall Street Journal. Details haven’t been publicly disclosed but TikTok may end up using Oracle’s cloud capabilities to store U.S. data. The American firm could also take a stake in TikTok. Any deal would need clearance from the Committee on Foreign Investment in the United States and Beijing.

Oracle’s mooted deal doesn’t obviously satisfy U.S. lawmakers’ demands for a full sale and clean break of TikTok from its Chinese owner but it has one advantage: Ellison has a close relationship to Trump. The founder held a fundraiser for the president this year.

Of course, Trump has also made being tough on China a centerpiece of his re-election campaign and is known to backtrack on deals. In 2018, Beijing thought it sealed a U.S. trade pact, only to have Trump reject it after negative headlines. TikTok users who also signed up to attend a Trump rally in Oklahoma in June with no intention of showing up also got under the president’s skin.

Beijing is also a factor because it rejects a forced sale that would make the People’s Republic look weak. China even went as far in August to introduce export controls that apply to TikTok to complicate any dealmaking. Politics on both sides remain a wild card that could upend the app’s fate.

CONTEXT NEWS

- Microsoft said in a statement on Sept. 13 that China’s ByteDance informed the company that it would not be selling its TikTok U.S. operations to the software maker. ByteDance has chosen Oracle as TikTok’s “trusted tech partner,” but any deal won’t be structured as an outright sale, The Wall Street Journal and Reuters reported. The situation is fluid and a deal hasn’t been finalised, they added.

- U.S. President Donald Trump issued an executive order in August requiring ByteDance to divest of TikTok’s U.S. assets and banning certain transactions with it, citing national security concerns. On Sept. 10, Trump said TikTok would either be sold or closed down.

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

(Editing by Una Galani and Sharon Lam) ((gina.chon@thomsonreuters.com; Reuters Messaging: gina.chon.thomsonreuters.com@reuters.net))