Oracle finally strikes an unexpected deal with TikTok

TikTok Logo
Oracle makes deal with TikTok

After weeks of speculation, the Chinese owned social media app has finally struck a deal with Oracle. This came to be after Trump’s executive order to ban the app in America was approaching its deadline. However, ByteDance’s choice of Oracle has taken many analysts by surprise. They had expected TikTok to strike a deal with Microsoft. However, in a swift turn of events, the company chose Oracle instead.

What are the details

It is still unclear whether Oracle will take up a majority stake in the social media app. So far, the company hasn’t said anything with regards to the TikTok deal.  Insider reports indicate that Oracle was endorsed by President Trump last month as a possible partner. He indicated that he’d support any deal between Oracle and TikTok calling it a “great company”. Oracle has enjoyed close ties with the Trump administration. Its founder, Larry Ellison, hosted a fundraiser for Mr. Trump earlier this year and its Chief Executive served on the president’s transition team and is a regular at the White House. However, Mr. Trump’s endorsement of Oracle has raised concerns that the Chinese government may try to further complicate the deal in retaliation to Trump’s tough stance on China.

What will the future of the two companies look like?

TikTok has been a remarkable success in America. With this success, it has managed to raise billions of dollars worth of funding from various big investors like Softbank and GGV capital. This cooperation has earned the company a valuation of close to 100 billion dollars. Therefore, a successful venture between TikTok and Oracle could mean huge financial gains for both companies. This will be the first time Oracle is investing in the field of social media. Some industry analysts fear that it may not be a good fit for Tiktok. However, it may be too early to predict how these two companies will fare.

Watchdogs have also raised concerns on how Oracle shall serve to eliminate the security threats cited by the US government. TikTok’s current algorithm considered a threat to US internal security. Therefore, Oracle is expected to change that; by taking full control of the code to ensure that it conforms with American privacy standards. This is likely to be the easiest part of the partnership. However, right now; Oracle and Bytedance are only focused on coming up with a good deal and maintaining TikTok’s relevance in the ever changing social media world