ByteDance Faces TikTok Divestment Deadline as Oracle Emerges as Key Contender
Chinese tech giant ByteDance has less than two weeks to divest its popular video app TikTok or face a renewed U.S. ban. As the April 5 deadline looms, cloud computing powerhouse Oracle (ORCL) has surfaced as a key player in potential solutions to address national security concerns.
TikTok’s Divestment Mandate and the U.S. Ban
ByteDance is under federal mandate to sell TikTok’s U.S. operations or see the app banned, following legislation passed by Congress. While President Trump initially delayed enforcement of the law for 75 days upon taking office, Vice President JD Vance recently indicated that an agreement satisfying security concerns by early April was “almost” certain.
President Trump has hinted that four bidders have emerged but did not disclose their identities. Previously mentioned potential buyers include Microsoft (MSFT), AI startup Perplexity, and a coalition of billionaire investors. However, one consistent name in discussions has been Oracle.
Oracle’s Strategic Position in the TikTok Deal
Oracle, co-founded by billionaire Larry Ellison, is already TikTok’s primary cloud provider and previously attempted to acquire the platform in 2020 under Trump’s first term. In 2022, TikTok began routing its U.S. traffic through Oracle’s cloud as part of “Project Texas,” an initiative aimed at securing American user data.
According to reports from The Information, Oracle is now a frontrunner in discussions about a new arrangement. A Bloomberg report suggests the White House is considering a deal in which Oracle would oversee the security of U.S. user data in exchange for a stake in TikTok, while ByteDance would retain control of the app’s algorithm.
Neither TikTok nor Oracle has publicly commented on these reports.
Other Potential Solutions Under Consideration
On Friday, Reuters reported an alternative scenario where ByteDance’s largest non-Chinese investors, including Susquehanna International Group’s Jeff Yass and General Atlantic’s Bill Ford, could increase their stakes to acquire TikTok’s U.S. operations. Under this structure, Oracle would safeguard American user data to ensure compliance with U.S. regulations. This deal could reduce Chinese ownership below the critical 20% threshold required to avoid a ban.
Trump, Xi, and the Geopolitical Dimension
Investor and Shark Tank star Kevin O’Leary, part of a consortium pursuing a TikTok acquisition, emphasized that the final decision hinges on U.S.-China relations.
“It doesn’t matter what I want or what Larry wants,” O’Leary told Yahoo Finance. “What matters now is the narrative between Xi and Trump. The question is, ‘Does Xi want to sell TikTok, yes or no?'”
ByteDance operates under Chinese Communist Party (CCP) regulations, which require it to share user data upon request. U.S. intelligence officials have raised concerns that TikTok’s algorithm could be used by China to access sensitive American data.
Legislative and Legal Challenges
To mitigate security risks, former President Biden signed legislation in April 2024 mandating TikTok’s divestment. The U.S. Supreme Court upheld the law against a constitutional challenge from TikTok and its users. The law prohibits app stores, such as those operated by Apple (AAPL) and Google (GOOG, GOOGL), from offering TikTok unless it is controlled by a non-adversarial country.
Despite the brief shutdown of TikTok’s U.S. operations on January 20, Trump issued an executive order delaying enforcement. While he has signaled openness to extending the deadline if needed, new legislation would be required to overturn the ban entirely.
What’s Next?
Vice President Vance has expressed confidence in finalizing a deal before the April 5 deadline, emphasizing the complexity of structuring legal agreements between investors, service providers, and regulatory bodies.
Trump has also shown enthusiasm for Ellison’s involvement in the matter. In a recent press conference, he jokingly proposed that a buyer “give half to the United States of America” in exchange for approval, to which Ellison responded, “Sounds like a good deal to me, Mr. President.”
Despite Trump’s past denials of direct talks with Oracle about TikTok, speculation remains high that the cloud computing giant could play a central role in resolving the dispute. With the deadline fast approaching, all eyes are on ByteDance, Oracle, and U.S. regulators to determine TikTok’s fate in America.