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Oracle seals deal to become TikTok cloud provider

(Image credit: Image Credit: Ken Wolter / Shutterstock)

Oracle has confirmed it will become a minority stakeholder in TikTok Global, the new business spun out of the ByteDance-owned Chinese operation, and will provide the new company with cloud services.

Oracle Corporation announced today that it was chosen to become TikTok’s secure cloud technology provider. This technical decision by TikTok was heavily influenced by Zoom’s recent success in moving a large portion of its video conferencing capacity to the Oracle Public Cloud,” the company explained.

“As a part of this agreement, TikTok will run on the Oracle Cloud and Oracle will become a minority investor in TikTok Global,” said Safra Catz, Oracle CEO.

“We are a hundred percent confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok’s American users, and users throughout the world. This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders.”

The deal came about as a result of an executive order issued by US President Donald Trump, over fears the fast-growing Chinese company represented a threat to national security. Parent company ByteDance was given until mid-September to sell of the US division of TikTok.

Microsoft emerged as the leading candidate for an acquisition of TikTok US, but in the end the firm opted to spin out a new business (TikTok Global) following pressure from Beijing not to cave in to US demands.

Besides Oracle, Walmart will also have a minority stake in the business. The firm explained it has “tentatively agreed to purchase 7.5 percent of TikTok Global as well as enter into commercial agreements to provide our ecommerce, fulfillment, payments and other omnichannel services to TikTok Global.”

“Our CEO, Doug McMillon, would also serve as one of five board members of the newly created company. In addition, we would work toward an initial public offering of the company in the United States within the next year to bring even more ownership to American citizens.”

The deal still needs approval from the US Committee on Foreign Investment, but appears to have President Trump's blessing.