Tech giant Oracle stands aside as TikTok flounders

Kadia Goba
·4 min read

The News

TikTok’s most powerful U.S corporate partner is sitting on the sidelines as the U.S. House of Representatives stands on the brink of passing a bill Wednesday that would force the app’s Chinese owners to sell it or face a ban.

TikTok’s lobbyists have complained to House aides that the Austin, Texas-based tech giant Oracle — a politically connected Washington powerhouse with 24 lobbying firms on payroll last year that forged deep ties to Donald Trump’s White House — has been almost entirely absent from the heated behind-the-scenes tussle over the bill.

The stakes are high for Oracle, which is one of the 30 most valuable companies in the world. The company’s role hosting TikTok’s U.S. data, and in theory guaranteeing its safety, was reportedly worth $1 billion. That contract to host TikTok’s massive video library represents one of the biggest prizes in the cloud computing industry. If TikTok is sold, Oracle would stand to lose that contract — especially if the app goes to a competing cloud company, Microsoft.

“TikTok has been vocal about their wish that Oracle would step up,” one senior aide to a Republican member told Semafor. ”They wish Oracle were being more proactive.”

TikTok has sought to play both outside and inside Washington games to stop the bill, known as the Protecting Americans From Foreign Adversary Controlled Applications Act. It has encouraged its millions of users to call members of Congress and demand “no” votes, while its CEO seeks meetings with members of Congress and TikTok creators visit the Hill.

Oracle representatives have told allies the company is staying out of the fight because part of its role is guaranteeing the integrity of TikTok’s data. A senior TikTok executive said the company understands the limits of Oracle’s role.

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TikTok and its few political allies — notably, internet freedom and First Amendment groups like the ACLU — will have another chance to forestall the bill in the Senate.

Some senators were skeptical Tuesday of the House’s move to focus legislation so narrowly on the app.

“You don’t want to get into establishing a precedent of naming an individual company,” said Sen. Todd Young, R-Ind.

But few bought TikTok’s attempts to link itself to small business owners who market on the app.

“I don’t think the American people are gonna believe that the Chinese Communist Party that has run every small business in China into the ground, that they are somehow riding to the rescue of American small business,” said Sen. Michael Bennet, D-Colo.

Kadia’s view

The House vote is a big step toward a ban — but there’s a long way to go.

Senate Majority Leader Chuck Schumer has not said whether and when he will schedule a vote.

And people following the case say TikTok will likely seek federal courts to block a ban or forced sale, citing First Amendment speech protections.

But one thing that’s become clear is how few friends TikTok now has in Washington.

Room for Disagreement

Elon Musk, whose firm Tesla could be collateral damage in a U.S.-China commercial conflict, came out against the bill on X Tuesday. “This law is not just about TikTok, it is about censorship and government control! If it were just about TikTok, it would only cite ‘foreign control’ as the issue, but it does not,” he wrote, citing a theory by Rep. Thomas Massie (R-Ky.) that the bill is a “Trojan horse.”

Notable

  • Oracle isn’t TikTok’s only fairweather friend: The Information reports that the big Silicon Valley funds that hold shares in ByteDance are also sitting this one out: “They don’t see any reason to speak out on such a polarizing issue, and some are afraid they’ll be perceived as disloyal to the U.S. if they come out in support of TikTok.”

  • The relationship on the ground between TikTok and Oracle “has become deeply untrusting and adversarial,” Forbes reported in August. “One source with knowledge of the companies’ actions characterized Oracle’s stance toward ByteDance as a ‘counterintelligence operation,’ rather than a normal customer relationship. Meanwhile, some ByteDance employees wonder if Oracle just wants to run up their bill.”