Deal

TikTok chooses Oracle as its American partner (sorry Microsoft)

Tuesday, September 15, 2020 by Snacks

A TikToker and a database walk into a bar... The wait to see who TikTok’s US parent will be is over and it’s… anticlimactic. Yesterday, Oracle confirmed it struck a deal with TikTok-owner Bytedance to become a “trusted technology provider” (read: not owner). Oracle would reportedly be managing TikTok’s US data. The deal still needs approval from the US and China. Somehow, this endless saga only started last month.

  • #1: Trump says he'll ban TikTok on concerns that Americans' user data could be shared with the Chinese government.
  • #2: Change of plans. The ban will happen unless an American company strikes a deal to acquire TikTok's US operations by September 20th.
  • #3: Oracle and a Microsoft-Walmart tagteam emerge as the leading suitors.
  • #4: China throws a wrench into acquisition talks, saying it needs to approve the sale of TikTok and its algorithms.
  • #5: Microsoft gets rejected by TikTok. Oracle does "Say So" Doja Cat dance.

Less of a parent... more of a guidance counselor. While Oracle will possibly get a stake in TikTok’s US assets, this isn't an acquisition. The "tech provider" role is vague, but it likely means TikTok will be moving its data to Oracle's cloud (and off Google's, where it is today). Oracle could also get TikTok to use its marketing software for ads. TikTok is a big sexy catch of a customer, so Oracle stock jumped 4% on the news.

THE TAKEAWAY

Is this a good deal for the US?... It certainly is for TikTok — the Tok gets to keep its 100M American users without giving up ownership of its business. But Trump has insisted the only way TikTok can avoid getting banned is a sale to a US company (this isn't that). Will Trump back off that demand? A few reasons he might:

  • Jobs: The US gets an American TikTok HQ with 20K employees.
  • Popularity: Trump will avoid the wrath of American TikTokers ahead of the election.
  • Connections: Oracle's founder/Chairman/CTO Larry Ellison is pretty tight with Trump.
Subscribe to Snacks