It remains to be seen if this will be a match made in heaven, but the time for an Oracle-TikTok moment may have finally arrived.
TikTok might be ready to tie the loose ends of a deal with Oracle (ORCL) to effectively outsource storage of its U.S. users' information to prevent its parent, China's ByteDance, from giving the data to China's government.
Prospects for a TikTok-Oracle agreement were first reported by Reuters.
While not commenting directly, Oracle Chief Executive Safra Catz said "The one thing I can tell you is we have an excellent relationship with the folks at TikTock," according to Oracle's latest earnings call transcript. Oracle Chairman and Chief Technology Officer Larry Ellison concurred. "Yeah, I'll second that," he added on the same investor call.
TikTok is among the most popular apps in the world, with tens of millions of users. But it drew scrutiny during the Trump administration for its collection of data on users.
In August, 2020 former president Donald Trump signed an executive order to address threat posed by TikTok seeking to force ByteDance to divest its U.S, operations.
"TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage," the order noted.
Bidding War with Microsoft
The order prompted a bidding war with rivals like Microsoft (MSFT), Twitter (TWTR) and Google (GOOGL) in the fray. Microsoft was considered a top contender until ByteDance surprised market watchers when it declined Microsoft's offer.
"ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests," Microsoft said in a statement at the time.
"To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas," Microsoft added.
Ellison's company held initial talks to buy TikTok’s operations in the U.S., Canada, Australia and New Zealand in August and September of 2020. Oracle was said to be working with existing ByteDance investors including General Atlantic and Sequoia Capital.
The Committee on Foreign Investment in the U.S., or CFIUS, will review any deal. The committee has "continued to harbor concerns over data security at TikTok that ByteDance is now hoping to address," Reuters reported.
Last month, Meta Platforms (FB) said it will focus on its own TikTok-like feature, Reels. Meta Chief Executive Mark Zuckerberg said competition from rival TikTok is having an impact on Meta's business. "People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term," said Zuckerberg during Meta's fourth quarter earnings call earlier this month
