Oracle to host TikTok as ‘secure cloud provider’
- Oracle has received Trump’s ‘blessing’ to acquire a share of TikTok
- Combined with Walmart, among other investors, the app’s global business will become US majority-owned
- Oracle is “a hundred percent confident” it can assure the security of users’ data
- The announcement is seen as a ‘win’ for Oracle’s slow cloud growth
TikTok may have secured its lifeline to a US audience, with enterprise software giant Oracle winning Trump’s approval to acquire a minority stake in the video-sharing platform’s newly-formed global business.
Acquiring 12.5% of TikTok, Oracle will become the company’s “secure cloud technology partner”, enabling TikTok to continue operating in the US and fortifying Oracle’s bid to compete more closely with cloud giants like Amazon and Azure.
US retail giant Walmart will also acquire 7.5%, making TikTok Global majority-owned by US investors and compliant with US laws and privacy regulations, and therefore resolving “outstanding issues” surrounding national security.
The firm added that four out of five of the board of directors will be American.
The new enterprise will create more than 25,000 new jobs in the US and pay more than $US5 billion in “new tax dollars” to the US Treasury. It will also be committed to going public within 12 months.
Oracle, whose leadership has kept more favorable ties with the Trump administration than cloud rivals, said the decision by TikTok was “heavily influenced” by Zoom’s recent success in moving a large portion of video conferencing capacity to its public cloud.
“TikTok picked Oracle’s new Generation 2 Cloud infrastructure because it’s much faster, more reliable, and more secure than the first generation technology currently offered by all the other major cloud providers,” said Oracle chief technology officer Larry Ellison.
Oracle said that data privacy for “100 million American TikTok users” will be established by moving all of the app’s American data to Oracle’s cloud data centers, “the most secure cloud data centers in the world.”
“This unique technology eliminates the risk of foreign governments spying on American users or trying to influence them with disinformation,” the firm added.
Oracle CEO Safra Catz said the firm was “a hundred percent confident” in its ability to secure the service developed and now partly-owned by Chinese tech firm Bytedance.
Speaking to Bloomberg, Scott Galloway, a professor of marketing at New York University, described the agreement as “strange” and “a giant step backward for the government’s approach to capitalism.”
While Oracle is the world’s second-largest software maker after Microsoft, the firm has struggled to catch up in the massive public cloud market.
“For Ellison and Oracle, this is a strategic win on the infrastructure/cloud front by inking this partnership and should competitively help its efforts within the Beltway going forward,” Dan Ives, an analyst at Wedbush Securities, told the publication.
“A TikTok technology partnership is a symbolic shot in the arm and could have positive financial ripple impacts.”