Oracle-TikTok Deal Gets OK From Trump

Oracle confirmed plans to become TikTok’s cloud provider and announced it will take a 12.5 percent stake in the popular social media app.

President Donald Trump Saturday said he has given his “blessing” to a deal between Oracle and social media app TikTok that aims to prevent a shutdown of the popular social media app in the U.S.

Oracle and TikTok followed Trump’s comments with announcements that Oracle will become the cloud provider and a minority shareholder in the app, which is owned by China-based ByteDance. Redwood Shores, Calif.-based Oracle said it will acquire a 12.5-percent stake in TikTok, though the terms of the acquisition weren’t disclosed.

[Related: TikTok Rejects Microsoft Acquisition Offer, Future Unclear For Oracle Bid]

The deal seems likely to avert a ban on downloads of the TikTok app that the Commerce Department was set to enforce starting Sunday. Trump had previously called for a ban on TikTok unless it divested its U.S. operations.

In comments reported by multiple media outlets, Trump said on Saturday, “I have given the [Oracle-TikTok] deal my blessing—if they get it done that’s great, if they don’t that’s OK too.”

“I approved the deal in concept,” Trump said, addressing reporters at the White House, according to reports.

Earlier this week, TikTok rejected Microsoft’s bid to acquire TikTok’s U.S. operations. That move shifted the focus to an alliance between TikTok and Oracle, whose cloud platform competes with Microsoft’s Azure cloud. Larry Ellison, Oracle’s co-founder and chief technology officer, is also a friend and supporter of President Trump.

In its news release Saturday, Oracle said it won the deal with TikTok due in part to the Zoom videoconferencing app moving a sizable part of its capacity to the Oracle Public Cloud platform.

The news release includes a quote from Ellison that takes a swipe at Oracle’s larger cloud rivals, saying that “TikTok picked Oracle’s new Generation 2 Cloud infrastructure because it’s much faster, more reliable, and more secure than the first-generation technology currently offered by all the other major cloud providers.”

Ellison did not mention the cloud competitors by name, but Amazon Web Services, Microsoft Azure, Alibaba Cloud and the Google Cloud all boast larger market shares in infrastructure-as-a-service than Oracle, according to research firm Gartner.

Oracle CEO Safra Catz is also quoted in the company’s news release, saying that “we are 100 percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world.”

Trump’s threats to ban TikTok came as his administration aired concerns that the app could be used by the Chinese government to acquire data on Americans.

In the release, Oracle said it plans to combine its cloud technology with measures such as code reviews and monitoring to ensure that data for U.S. users of TikTok is kept secure and private.

TikTok features short videos posted by users and has emerged as a hugely popular social app in the U.S. in recent years, particularly among younger users.

In a tweet Saturday, TikTok confirmed that Oracle will become the “trusted technology provider” for the app, and said it’s also working on a commercial partnership with Walmart.

Oracle and Walmart will be given the chance to take a total stake of up to 20 percent in TikTok prior to an initial public offering by the company, TikTok said.

“Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global,” said Ken Glueck, Oracle executive vice president, in a statement provided to CRN.