TikTok: What is Oracle and why does it want the video-sharing app?

BBC Technology 14 Sep 2020 12:39

By Cristina Criddle
Technology reporter

Oracle founder Larry Ellison
image copyrightGetty Images

Software giant Oracle is believed to be the frontrunner in the bidding war for short-form video app TikTok.

Microsoft dropped out of negotiations with Chinese-company Bytedance on Sunday night, after which Reuters reported that Oracle would become its technology partner and assume management of TikTok's US user data.

The partnership should address US security concerns but not be a complete sale, sources told the agency.

However, Chinese state media has said Bytedance will not sell its US operations outright, nor will it share TikTok's source code.

Oracle's security roots

Oracle sells database technology and cloud systems to businesses. It was one of the first companies to help clients structure their records in this way.

Co-founder and current chairman Larry Ellison named the company after the codename given to a project for its first customer, in 1975: the Central Intelligence Agency (CIA).

The firm was founded two years later and went on to complete contracts for the CIA, Navy Intelligence, Air Force Intelligence and the National Security Agency.

But its clients and cloud-based services now extend far wider, from serving auto-makers including Mazda and Yamaha to retailers such as the UK's Co-op and Debenhams chains.

"The information about your banks, your checking balance, your savings balance, is stored in an Oracle database," he said in Jeffery Rosen's 2004 book The Naked Crowd.

A safe choice?

"On the surface, Oracle and TikTok don't seem like bedfellows," said Chris Stokel-Walker, author of a forthcoming book about the platform.

"But there is underlying geopolitics. If [US President Donald] Trump's fears around TikTok are rooted in security, the company would be a safer bet."

Mr Ellison - who is ranked the world's fifth richest person by Forbes - has been openly supportive of President Trump and held a fundraiser for him in February.

"I think Oracle is a great company, and I think its owner is a tremendous guy," Mr Trump said last month. "He's a tremendous person. I think that Oracle would be certainly somebody that could handle it."

TikTok deadlines:

Presentational grey line

Oracle has been accused of hostility towards China, after firing 900 staff from its team in the country last year, in the same week additional tariffs on Chinese goods were introduced in the US.

It is understood that Oracle's involvement in TikTok will not be an outright sale but instead a "tech partnership", the Wall Street Journal and Reuters report.

Two weeks ago, China announced new government restrictions on tech exports. They mean some technologies involving artificial intelligence techniques need government approval before any sale to a foreign entity takes place.

"A deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok, and the White House accepting such a deal would demonstrate that this exercise was pure grift," Alex Stamos, former chief security officer at Facebook, tweeted.

"The security element with Oracle could ease tensions, but it can also help TikTok be a bit more mature in its outlook," said Tamara Littleton, founder of The Social Element consultancy.

TikTok and Oracle both declined to comment when contacted by the BBC.

More on this story

Continue reading original article...


OracleTikTokBytedanceUSMr Ellison
You may also like