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Analysis: How Oracle ended up with TikTok

September 14, 2020. Summarized by summa-bot.

On the face of it, a business partnership between US tech firm Oracle and Chinese social media phenomenon TikTok is a head scratcher.

TikTok declined to comment about the deal, while Oracle (ORCL) and TikTok's Chinese parent company ByteDance have not responded to requests for comment.

"I think Oracle is a great company and I think its owner is a tremendous guy, a tremendous person," Trump said late last month after the Financial Times reported that Ellison was "seriously considering" a deal with TikTok.

TikTok resorted to Oracle "mainly out of political considerations," said Shirley Yu, visiting fellow at the London School of Economics and founder of an eponymous company that assesses strategy, business, and political risk for companies working in China.

Reporting suggests that Oracle won't be able to buy TikTok outright, but given its expertise in data and cloud security, it could become the US host of TikTok data.

"Oracle has incredible data and cloud security," said Johnson, so the US national security establishment may determine that "as long as [US data] is here, it's fine. "

"Based on early reports and how they are characterizing this as not an 'outright sale' and calling Oracle a 'trusted tech partner,' this has likely turned into a deal about Oracle's cloud, and storing US-based TikTok users' data in Oracle's data center," said Brad Haller, a director in the mergers and acquisitions practice at national consulting firm West Monroe.

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