Software company Oracle is concerned that a potential ban on TikTok in the United States could negatively impact its finances. Congress passed a bill that would require TikTok’s parent company, ByteDance, to sell the app within 12 months or face an outright ban. Oracle provides cloud infrastructure support for TikTok and warned investors that if they couldn’t provide these services, their revenue and earnings would suffer. The company is estimated to bring in between $480 million and $800 million in annual revenue from its partnership with TikTok.
Oracle had previously attempted to acquire TikTok as part of a joint bid with Walmart when the Trump administration was considering banning the app in the US in 2021, but the talks were unsuccessful. Oracle remains a potential buyer if ByteDance is forced to sell TikTok in the future. TikTok has argued that the divestment bill violates the First Amendment and claims that selling the app within 12 months is not feasible.
Former US Treasury Secretary Steven Mnuchin has shown interest in purchasing TikTok and has been discussing plans to rebuild the app’s recommendation algorithm from scratch in the US. Oracle’s stock remained flat following the news of the potential ban on TikTok. The company is concerned that compliance with new laws may increase its expenses as specialized resources may be needed for compliance efforts. Oracle has not yet commented on whether it would be interested in acquiring TikTok if the app is put up for sale.
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https://nypost.com/2024/06/25/business/oracle-says-us-ban-of-tiktok-would-hurt-its-profits/