Software giant Oracle is believed to be the frontrunner in the bidding war for short-form video app TikTok.
Microsoft dropped out of negotiations with Chinese-company Bytedance on Sunday night, after which Reuters reported that Oracle would become its technology partner and assume management of TikTok’s US user data.
The partnership should address US security concerns but not be a complete sale, sources told the agency.
Oracle sells database technology and cloud systems to businesses. It was one of the first companies to help clients structure their records in this way.
Co-founder and current chairman Larry Ellison named the company after the codename given to a project for its first customer, in 1975: the Central Intelligence Agency (CIA).
The firm was founded two years later and went on to complete contracts for the CIA, Navy Intelligence, Air Force Intelligence and the National Security Agency.
News site Gizmodo has detailed Oracle’s involvement with US government intelligence community, and says it is relationship that has been “frequently ignored by people who like to pretend Oracle was just another humble Silicon Valley start-up”.
But its clients and cloud-based services now extend far wider, from serving auto-makers including Mazda and Yamaha to retailers such as the UK’s Co-op and Debenhams chains.
Oracle’s technologies can be used to keep track of everything, Mr Ellison has said.
“The information about your banks, your checking balance, your savings balance, is stored in an Oracle database,” he said in Jeffery Rosen’s 2004 book The Naked Crowd.
“Your airline reservation is stored in an Oracle database. What books you bought on Amazon is stored in an Oracle database. Your profile on Yahoo! is stored in an Oracle database… Privacy is already gone.”
A safe choice?
The US administration claims TikTok and other Chinese apps are national security threats which is why – given its history in intelligence – Oracle might be considered a trustworthy option.
“On the surface, Oracle and TikTok don’t seem like bedfellows,” said Chris Stokel-Walker, author of a forthcoming book about the platform.
“Oracle is a relatively boring business-to-business company, whereas TikTok is a youth-centred, casual app.
“But there is underlying geopolitics. If [US President Donald] Trump’s fears around TikTok are rooted in security, the company would be a safer bet.”
The president had previously said he thought Oracle was best placed to seal the TikTok deal.
“I think Oracle is a great company, and I think its owner is a tremendous guy,” Mr Trump said last month. “He’s a tremendous person. I think that Oracle would be certainly somebody that could handle it.”
15 September: Deadline given by President Trump for Bytedance to find a deal
20 September: Executive order due to come into effect prohibiting companies under US jurisdiction doing business with Bytedance
12 November: Second executive order comes into effect, giving Bytedance a deadline to fully divest the US assets of TikTok
But any deal would require the approval of both American and Chinese governments – and Chinese state media has reported that Bytedance will not sell to the company to Oracle.
Oracle has been accused of hostility towards China, after firing 900 staff from its team in the country last year, in the same week additional tariffs on Chinese goods were introduced in the US.
Employees blamed tensions between the US and China for the cuts…