"The TikTok deal positions Oracle as a key investor and security partner, potentially providing a new revenue stream through cloud services and data management for TikTok's 170 million U.S. users. While Oracle's cloud infrastructure growth has been driven primarily by artificial intelligence (AI) demand, concerns have skyrocketed in recent weeks over Oracle's debt and capital expenditures, as well as fears of an AI-spending slowdown."
"TikTok CEO Shou Chew informed employees through an internal memo that ByteDance had signed agreements to create TikTok USDS Joint Venture LLC. The new entity will be majority-owned by American investors, with Oracle, private equity firm Silver Lake, and Abu Dhabi-based MGX collectively holding a reported 45% to 50% stake in the entity. Oracle will serve as the "trusted security partner," responsible for storing U.S. user data in its cloud, auditing compliance with national security terms, and overseeing algorithm security."
Oracle shares jumped in premarket trading after ByteDance signed binding agreements to form a U.S. joint venture majority-owned by American investors, with Oracle, Silver Lake and MGX holding a reported 45% to 50% stake. Oracle will act as the trusted security partner, storing U.S. user data in its cloud, auditing compliance with national security terms, and overseeing algorithm security. The deal is expected to close on Jan. 22 and addresses U.S. laws requiring divestiture from ByteDance. Oracle already hosts U.S. TikTok data under Project Texas, and the expanded role could secure long-term, high-margin cloud workloads outside AI contracts.
Read at 24/7 Wall St.
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