"President Trump says a U.S. company or companies will buy Chinese social media company TikTok. The service mostly includes short user-created videos. China's ByteDance owns it. The U.S. government has concerns about security because TikTok collects user data. It could be a way for China to monitor the habits of U.S. citizens. That makes it a security problem. In all likelihood, an American owner would protect this data."
"The most common rumor is that a group led by Oracle Corp. ( NYSE: ORCL), one of the largest enterprise software companies in the world, will purchase TikTok. Oracle's customers are businesses and the government. It seems to be a very poor fit with TikTok. The ownership might also include ByteDance, but U.S. companies would control the user data. Does an individual consumer product belong in Oracle's portfolio?"
"Oracle's stock recently surged because it said its AI cloud infrastructure would bring in $144 billion by its 2030 fiscal year. The problem with the assessment is that five years is a very long time in the artificial intelligence business. Nevertheless, Oracle's market cap rose over $100 billion in one day. TikTok is expected to sell for $100 billion or more."
U.S. officials view TikTok's Chinese ownership by ByteDance as a national security risk because TikTok collects extensive user data that could enable monitoring of U.S. citizens. The Biden administration demanded a sale and Congress backed that position before the Trump administration reversed the requirement; ownership negotiations have continued intermittently. Oracle has emerged as a rumored buyer despite an apparent mismatch between its enterprise-focused business and TikTok's largely individual user base. Oracle touted large AI cloud revenue forecasts while its market cap jumped; TikTok's valuation could exceed $100 billion and Microsoft could leverage U.S. users for consumer AI distribution.
Read at 24/7 Wall St.
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