Database giant Oracle confirmed on Monday that it’s slated to become the “trusted technology partner” of TikTok, the Chinese-owned viral video site with more than 100 million U.S. users. The news came hours after Microsoft revealed that TikTok owner ByteDance had rejected its acquisition, putting an end—for now at least—to a geopolitical drama that has roiled the tech world for months.
The TikTok controversy first flared this summer when the Trump Administration declared it would “ban” the app on national security grounds unless an American company took control of ByteDance’s U.S. operations. In recent weeks, other rumored suitors included Google, Twitter and WalMart.
By Monday, reactions to the Oracle-TikTok deal—which is subject to final review from a powerful interagency committee called CFIUS—began pouring in. For the most part, they are not positive.
Tech watchers have seized on the fact that, under the proposed terms, Oracle will just be a “partner” rather than take ownership of the app’s U.S. operations.
What’s more, it appears Oracle will not get access to the algorithms that power TikTok’s AI, which is considered the company’s secret sauce—and which could leave U.S. users vulnerable to Chinese surveillance, as Facebook’s former security chief, Alex Stamos, pointed out.
Even Sen. Josh Hawley (R-MO), a close ally of Trump and a China hawk, expressed concerns about whether the “partnership” arrangement would safeguard Americans’ data from Beijing.
Others on Twitter, meanwhile, focused on Oracle’s close ties to the Trump Administration—Oracle founder Larry Ellison has hosted fundraisers for the President—to suggest that political influence determined the outcome of the deal more than business or security concerns.
Some reactions to TikTok’s winning bid focused on the business implications of the deal. Oracle’s interest in TikTok has earlier raised eyebrows because the company has no experience in consumer products—raising the question of why it wanted the app in the first place.
According to the Wall Street Journal, which first reported Oracle’s winning bid, the TikTok deal is about the company’s cloud computing operations: “Oracle’s interest in TikTok is primarily driven by kick-starting its fledgling cloud-computing business, which remains far behind market leaders Amazon.com Inc. and Microsoft,” sources told the Journal.
If Oracle’s interest in TikTok is primarily about cloud computing, the deal could come at the expense of Google, which is Oracle’s longtime nemesis and which currently provides cloud services to TikTok. Veteran tech reporter Kara Swisher noted the next steps are uncertain:
Finally, some observers—including Box CEO Aaron Levie—used the news to joke about what the likes of Oracle owning an app that is primarily defined by teen culture.
One important figure who has yet to weigh in on the deal is President Trump, whose outbursts gave rise to the drama over TikTok in the first place. In the last 12 hours, the President had tweeted repeatedly about his poll numbers and various alleged hoaxes and conspiracies, but issued no statements about the tie-up between Oracle and TikTok.
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