How crazy an idea is Oracle buying TikTok?

The Big Story

Renegades unite

Whenever a 43-year-old database company gets a chance to buy a stake in a fast-growing social media property that's almost completely irrelevant to its core business strategy but will make the most powerful man in the world like it even more then, obviously, it's gotta take it.

Quick recap, because a lot's happened: Following a threat to ban TikTok in the U.S., President Trump last week ordered TikTok parent company ByteDance to sell its U.S. operation within 90 days to a bidder subject to approval by CFIUS. There are only a few tech companies on Trump's nice list, and Oracle co-founder Larry Ellison runs one such company.

• Microsoft has already made public its interest in some of TikTok's operations, including the versions of the app run in the U.S., Canada, Australia and New Zealand.
• Now Oracle is said to be a bidder for those assets, working in conjunction with current TikTok shareholders Sequoia Capital and General Atlantic, according to the Financial Times. Trump appeared to confirm Oracle's interest Tuesday afternoon.
• The FT report contains this telling sentence: "It is unclear whether the White House is more supportive of Oracle's approach than that of Microsoft."
• Ellison, who has hosted fundraising events for Trump's campaign and is a big fan of dubious COVID-19 treatments such as hydroxychloroquine, is easily Trump's biggest fan in Silicon Valley, and vice versa.

Put aside the chummy relationship between a cantankerous billionaire and a man who played a cantankerous billionaire on television: What might Oracle actually do with TikTok?

• TikTok's fast-growing service would help prop up Oracle's fledgling cloud infrastructure business, and its artificial intelligence algorithms could also improve Oracle's technology in this extremely competitive space.
• It's amazing how often this is overlooked in any discussion involving Oracle, but the company runs one of the world's leading data broker operations, and TikTok users generate massive amounts of data that advertisers would love to have access to.
• Even a partial stake in TikTok could pay handsomely down the road at a time when Oracle's core businesses are struggling. (Don't forget that Oracle's enterprise tech conglomerate was assembled over years of ferocious M&A activity; the company is well versed in the art of the deal and would surely only sign off on something that makes a lot of sense.)
• Also, never underestimate Ellison's interest in spiting the competition: Denying Microsoft Azure a chance to host TikTok counts as a win.

It's quite possible that Oracle's bid is just a distraction, a planted headline to get Wall Street buzzing and to force Microsoft to cough up more than it might have otherwise planned were it the sole bidder.

But there's also a more troubling possibility: that Oracle's involvement is a preview of what tech deal-makers can expect during a possible second term for the Trump administration.

• Don't forget that Trump has insisted that any deal involving TikTok result in the U.S. Treasury getting a cut, perhaps the most shocking public provision attached to a potential tech merger in recent history. While much of the tech industry recoiled at the idea, Oracle remained silent.

And an Oracle-Trump union does make a lot of sense. After all, former enterprise sales executive Tom Siebel once compared Oracle's business tactics in the 1990s to another controversial Republican president: "This is the Richard Nixon school of software marketing," he said, describing Ellison's desire to destroy his company.

In 2020, maybe it's the Donald Trump school of tech takeovers.

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