Business software giant Oracle planted seeds at the dawn of the Trump administration that may well yield results in the coming weeks – the approval of a deal to allow it to handle the data from the popular short-form video app TikTok.
Over the weekend, Oracle emerged as the surprise winner in the TikTok sweepstakes, an opportunity for an American company to work with the app that has been under fire from President Donald Trump over his claims that its Chinese ownership makes it a security risk. On Monday, Oracle spokeswoman Deborah Hellinger confirmed that the company is part of the proposal submitted by TikTok’s parent, ByteDance, to the Treasury Department to serve as the company’s “trusted technology provider.”
Neither TikTok nor Oracle outlined the details of the proposal, though it appears to fall short of Trump’s initial call to ban the app in the United States unless its operations in the country were sold to an American company. The proposed arrangement would allow ByteDance to retain ownership but outsource management of data to Oracle’s cloud-computing operations, according to people familiar with the deal who spoke on the condition of anonymity to discuss them candidly.
If that less restrictive arrangement is approved, it would seem to show that Oracle put itself in a position to persuade the president to dial back his earlier demands. Shortly after Trump’s 2016 election, Oracle chief executive Safra Catz served on his transition team. She has also dined at the White House with Trump. And Oracle co-founder and chief executive Larry Ellison hosted a fundraiser for Trump at his Rancho Mirage, Calif., estate in February.
Catz has also fostered a relationship with Trump’s trade adviser Peter Navarro, an aggressive advocate of banning TikTok in the United States rather than allowing the sale of its U.S. operations to an American company. But Navarro has been silent on the TikTok proposal that calls for ByteDance to remain an owner while Oracle becomes its technology partner because of his close relationship with Catz, according to a former U.S. official familiar with the matter, who spoke on the condition of anonymity because of the matter’s sensitivity.
The irony is that Navarro opposed a deal with Microsoft, which would have given a U.S. company control of TikTok and its data and algorithms, but he has said nothing about the Oracle arrangement, which would be far less protective of national security, the former official said.
“This deal on its face does not smell right and ordinarily Peter would be out there bashing it,” the former official said. “But he can’t. He’s way too close to Oracle.”
In response, the White House pointed to comments Tuesday afternoon by the president in which he praised Ellison and said the resolution of the deal was close.
“He’s been, really, a terrific guy for a long time. So we’re going to take a look,” Trump said.
Oracle’s chief Washington lobbyist, Ken Glueck, said Catz and Navarro have not discussed the TikTok deal.
Ellison co-founded Oracle in 1977 and fueled its growth with the development of a “relational database,” a type of software that allowed business customers to more efficiently store and access their digital information. The company became the leader in database software, a geeky but crucial technology where it competed with Microsoft and IBM. Its success helped Ellison become one of the world’s wealthiest people, with a net worth currently around $71 billion, according to the Bloomberg Billionaires Index.
But the Redwood City, Calif.-based company has struggled with the transition among business customers to cloud computing, in which they rent data storage and processing services from other firms rather than buying software to handle those operations on their own. Companies such as Amazon and Salesforce leaped ahead of Oracle in some cloud markets, and Oracle’s stock price has largely languished for much of the past decade relative to those rivals. (Amazon chief executive Jeff Bezos owns The Washington Post.)
To compete, Oracle has been an aggressive acquirer, buying up cloud-computing companies that specialize in business computing. The company has never focused on consumer markets, which is one reason its interest in TikTok is striking.
Oracle’s leadership has also worked hard to cultivate its relationship with Trump. Unlike Apple CEO Tim Cook and Facebook chief Mark Zuckerberg, two other top tech leaders who have dined with Trump, Ellison and Catz have actively supported Trump’s political aspirations.
Oracle’s efforts to sway Trump may have already shown some success. Oracle fought hard behind the scenes to prevent archrival Amazon from winning a $10 billion, 10-year contract to provide cloud computing services to the Pentagon.
Catz raised concerns about Amazon’s bid for the contract with Trump during an April 2018 dinner, just a month after the contract was announced.
