The owner of TikTok has chosen Oracle over Microsoft as its American tech partner. Managing Director at Wedbush Securities Dan Ives said the deal will allow the popular video-sharing app to continue operating in the US. (Sept. 14)
DAN IVES: Looks like Oracle is partnering with TikTok, which should enable it to keep that app alive and get White House approval. Not an acquisition, but a partnership, and ultimately it's a win-win for ByteDance and TikTok. There's some head-scratcher part of it, but ultimately it's not an acquisition.
And when you take a step back, the whole point here was going to be that this had to be sold, whether it's Microsoft or Oracle. A partnership for Oracle, it gives them another feather in the cap in terms of a crown jewel asset in terms of TikTok, a stake, which helps its value from an investor perspective and, I think, ultimate within the Beltway, further cement or Oracle's reputation. And of course that relationship within the Beltway and Ellison, probably just further helps this deal.
There was an ultimatum to sell it, but I think what ultimately happened is that once China got involved really put a poison pill in the deal for the algorithm not to be sold. It's all about making sure the data does not go to China and their security issues.
Oracle will now be a repository and really control of that data, which could ultimately make the White House and Trump sleep better at night, given that was the big issue here. Although it still has not been approved by the White House.