TikTok has selected Oracle as its “trusted technology partner” in the U.S., according to a statement issued by the enterprise technology solutions firm Monday. While details of the agreement, including whether Oracle will net TikTok’s valuable algorithm, are scant, the announcement could be welcome news for brands and marketers that have been placing bigger bets on the popular video-sharing app in recent months.
The Trump administration is currently reviewing the deal, Treasury Secretary Steven Mnuchin told CNBC Monday morning. TikTok has faced mounting challenges from the president over its parent company ByteDance’s ties to China, which has accelerated moves to buy parts of the business since early August, although an outright sale no longer seems to be in the cards, The Wall Street Journal reported over the weekend.
“Oracle confirms Secretary Mnuchin’s statement that it is part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider,” Oracle’s statement reads. “Oracle has a 40-year track record providing secure, highly performant technology solutions.”
Oracle securing a partnership could allow TikTok to continue operating as usual in the U.S. for the near term, arriving just under the deadline of a ban. Crucially, it might fortify the app’s standing and assure marketers that have seen the platform taken on a roller coaster ride in recent weeks.
“Even this small piece of certainty will provide a lot of reassurance to the whole ecosystem, from individual users to creators to brands, that there is a longevity plan and there won’t be any disruption to services,” said Evan Horowitz, CEO of creative agency Movers+Shakers, a firm focused on producing TikTok campaigns for brands like e.l.f. and NYX.
Finish line in sight
A representative for TikTok did not immediately respond to a request for comment. Meanwhile, Microsoft, once TikTok’s top suitor, confirmed its bid was turned down in a company blog post Sunday.
“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft’s blog post said. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement.”
In August, President Trump issued an executive order that prevents U.S. entities from conducting transactions with TikTok starting Sept. 20, a maneuver that could effectively shut down the app’s business. The president sees TikTok as a threat to national security and economic interests and has made unusual demands around a potential acquisition, such as suggesting the U.S. Treasury receive a “substantial” cut of any deal that’s made. TikTok and ByteDance have repeatedly resisted accusations that they share sensitive personal data with Chinese authorities, and the former recently sued the Trump administration over the ban order.
In terms of allaying the government’s concerns over data privacy, Oracle appears to be as well-suited to handle the task as Microsoft. CEO Larry Ellison is a high-profile Trump donor, and the president has previously expressed support toward Oracle in the race to strike a deal for the app that’s favored by U.S. teens. In the business sector, TikTok has not been broadly viewed as a significant security threat, but any lingering scrutiny could now dissipate as well.
“Although we and our clients have felt comfortable with TikTok’s handling of consumer data pre-acquisition, an Oracle acquisition will no doubt help alleviate any lingering fears about data usage and the company’s historical Chinese ownership and help the platform continue to build trust with audiences,” Mary Keane-Dawson, group CEO of the influencer marketing platform Takumi, said in emailed comments.
Platform on the rise
With the developments Monday, TikTok’s future in the U.S. — and status as the next big marketing platform —looks closer to being sorted, although the outcome is shaping up to be considerably different than the acquisition that was expected after Trump expressed a desire to see the app banned. Still, solidifying a U.S. tech partner could ensure that brands don’t abandon the platform in the near term, though many have continued to up advertising investments in the app even amid the volatility.
Microsoft, which held discussions with the app prior to the threat of a ban, emerged as an early frontrunner, a position that seemed shored up when Walmart announced it was joining the tech firm’s bid for an acquisition.
But the introduction of a new Chinese export law earlier this month complicated matters, as the rule would impact ByteDance’s ability to sell the TikTok algorithm, arguably its most valuable asset. Then late last week, Reuters reported that ByteDance would prefer TikTok to shutter in the U.S. versus going through with a sale, which could help explain why Oracle is now angling for partnership.
“The main issue this whole time has just been the question mark: This small, but real chance, that the administration could do something drastic and actually ban the app,” Horowitz said. “Given that that now seems to be resolved, I think everybody’s going to feel a lot more confident with their investments in the platform.”