Oracle to Maintain TikTok Cloud Partnership Despite China Deal, Sources Indicate

A framework agreement regarding the social media platform TikTok, embroiled in scrutiny over data security and its relationship with its Chinese parent company ByteDance, is reportedly nearing completion. Sources familiar with the negotiations indicate the restructured ownership will involve new investors alongside existing stakeholders in ByteDance. David Faber of CNBC reported the development, noting that the deal is anticipated to finalize within the next 30 to 45 days.

These sources, who requested anonymity due to the confidentiality surrounding the negotiations, further stated that Oracle’s cloud computing agreement with TikTok will remain intact under the new framework. This is a critical component, as Oracle’s role has been posited as a key element in addressing U.S. security concerns by providing a trusted infrastructure for data storage and management.

During a segment on CNBC’s “Squawk on the Street,” Faber elaborated, “‘I’m hearing it’s actually going to be relatively small in terms of the actual size of the checks that are written for the entity itself, and it will not be something that is going to go public at some point.'” This suggests the initial capital infusion may be more about restructuring and compliance than aggressive expansion, and an IPO is not currently being considered.

Neither the White House, TikTok, nor Oracle have immediately responded to requests for comment.

The future of TikTok in the U.S. has been a point of contention since the previous year, ignited by congressional concerns over potential data access and content manipulation by the Chinese government. Legislation was introduced that threatened to ban TikTok unless ByteDance divested its U.S. operations.

Deal negotiations have been protracted, marked by shifting deadlines and evolving demands. The political climate, particularly concerns over national security and data privacy, have heavily influenced the trajectory of these discussions. The proposed framework aims to alleviate these concerns through a combination of U.S.-based ownership and data management practices.

Treasury Secretary Scott Bessent disclosed earlier this week that the U.S. and China had reached a “framework” agreement concerning TikTok. While he noted that commercial terms had been in place for months, the deal’s progression was reportedly impacted by prior trade tensions.

Oracle has been a prominent figure in discussions surrounding TikTok’s future for some time. Their involvement, initially speculated as a potential investor or acquirer, has now solidified into a critical role in data management and security.

Reports earlier in the year indicated that the White House had designated Oracle to oversee TikTok’s data collection and software updates as a component of the proposed agreement. This arrangement leverages Oracle’s expertise in cloud infrastructure and data security to address concerns raised by U.S. lawmakers.