Oracle recognized in its annual report that a potential ban on TikTok in the United States could negatively impact its business. President Joe Biden had signed a bill requiring China’s ByteDance, TikTok’s parent company, to sell the popular video-sharing app within nine months, potentially extending to a year with approval, in order to avoid a ban in the US. This requirement was due to concerns about user data privacy and security, given TikTok’s Chinese ownership structure.
The software company Oracle provides cloud infrastructure services to TikTok, which has a massive user base of over 150 million in the US. The scrutiny over TikTok and its ties to China intensified in 2020 during Donald Trump’s presidency when there were calls to divest US assets or sell the app to American companies. This led to discussions with Microsoft regarding a potential deal. However, Oracle emerged as part of ByteDance’s proposal to the US Treasury Department to provide cloud services that could enable TikTok to continue operating in the United States.
Under a project named Project Texas, Oracle was tasked with ensuring TikTok’s services remained operational for US users by utilizing its cloud infrastructure based within the country. Additionally, Oracle would be responsible for developing the app and making it available on third-party app stores. Despite this partnership, Oracle’s stock price experienced a slight decline of 1.4% on Tuesday, dropping by $2 to $137.89.
Overall, the potential ban on TikTok raises concerns for Oracle due to its significant business ties to the popular social media platform. The uncertainty surrounding TikTok’s future in the United States has implications for Oracle’s cloud services and strategic partnerships. As the situation continues to evolve, Oracle will need to navigate the dynamic landscape of US-China relations and data security concerns to safeguard its business interests related to TikTok.
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https://www.baystreet.ca/techinsider/4373/Dont-Ban-TikTok-Oracle
