TikTok-Oracle deal still leaves room for surprises

There are more twists in the story, despite the collaboration agreement between the social network of videos TikTok and Oracle. Chinese owner ByteDance has chosen Larry Ellison’s company as a “trusted technology partner” for its overseas unit of short video applications, but any deal that does not lead to a full sale will raise national security concerns in Washington DC Given the frenzied anti-Chinese rhetoric and the approaching elections, Oracle’s ties to US President Donald Trump, are not a panacea.

The fate of TikTok 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 TikTok’s assets in the country. US lawmakers have raised concerns about China’s access to the app’s data. Microsoft and Oracle were among those interested. But Microsoft said Sunday that ByteDance informed it it was out of the race.

Oracle offered an ideal solution for ByteDance to avoid a complete sale, according to Reuters and The Wall Street Journal. Details have not been publicly disclosed, but TikTok may end up using Oracle’s cloud capabilities to store data from the United States.

The North American company could also take a stake in TikTok. Any operation would need the authorization of the Foreign Investment Committee of the United States and Beijing.

Oracle’s proposed deal obviously doesn’t meet US lawmakers’ demands for a full sale and clean spin-off of TikTok from its Chinese owner, but it does have an advantage: Ellison has a close relationship with Trump. The Oracle founder hosted a fundraiser for the president this year.

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Of course, Trump has also made tough on China a centerpiece of his re-election campaign and is known for backtracking from deals. In 2018, Beijing thought it had sealed a trade pact with the United States, but Trump rejected it after negative headlines.

TikTok users who signed up to attend a Trump rally in Oklahoma in June with no intention of showing up (and thus leaving the stands empty) hit the president where it hurts, for their part. Beijing is also a factor because it rejects a forced sale that would make the People’s Republic weak. China even introduced export controls on TikTok in August to complicate any deal.

The politics of both sides remains a wild card that could change the fate of the app.

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