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Oracle confirms TikTok deal - but it may not be quite what you were expecting

Oracle beats Microsoft to TikTok agreement


Enterprise software firm Oracle has confirmed it has reached a deal with embattled video sharing platform TikTok.

The agreement will see TikTok parent company ByteDance retain overall ownership of the app, while Oracle will take on responsibility for data management processes.

“Oracle confirms it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider,” said the firm in a statement.

The agreement is designed to appease the US government, which had ordered ByteDance to divest TikTok’s US operations over a perceived threat to national security. The Treasury Department is set to review the new proposal later this week.

If ByteDance and Oracle are successful in convincing the US of the proposal’s merits, the software firm will have seen off competitors including Twitter, Walmart and strong favorites Microsoft.

Oracle TikTok deal

In recent months, TikTok has found itself in the middle of a war between Washington and Beijing, with US legislators accusing ByteDance of feeding data to the Chinese government.

Following similar action taken in India, US President Donald Trump issued an executive order demanding ByteDance offload TikTok’s US business by September 15 - or else face a blanket ban in the country.

Oracle emerged as a surprise TikTok bidder last month, reportedly working in partnership with high-profile venture capital firms Sequoia Capital and General Atlantic, both of which already hold shares in ByteDance.

Given Oracle’s product portfolio is planted firmly in the world of b2b technology, commentators were mystified as to the advantage the firm might gain by an acquisition. Some outlets gestured towards Oracle CEO Larry Ellison’s public affiliation with Trump as a potential factor in the company’s involvement.

With the confirmation that Oracle will not acquire TikTok US outright, but rather provide underlying cloud infrastructure, the motivation behind the deal has become clearer. However, the full nature of the partnership is unlikely to be revealed until the agreement has been sanctioned by the US.