Two years ago, the Trump administration engineered a deal for Oracle to store all of TikTok’s US data, citing fears the Chinese-owned app would help Beijing spy on Americans. Oracle set out to win the TikTok data storage contract, leveraging US-China antagonism and Oracle CEO Larry Ellison’s personal relationship with Trump to inject new life into its flagging data storage business.
Two years ago, the Trump administration engineered a deal for Oracle $ORCL to store all of TikTok’s US data, citing fears the Chinese-owned app would help Beijing spy on Americans. Oracle set out to win the TikTok data storage contract, leveraging US-China antagonism and Oracle CEO Larry Ellison’s personal relationship with Trump to inject new life into its flagging data storage business.
Now, thanks to a new TikTok data privacy scandal, Oracle has finally won TikTok’s business.
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TikTok announced June 17 that it had “changed the default storage location of US user data” and “100% of US user traffic is being routed to Oracle Cloud Infrastructure.” The announcement coincided with a BuzzFeed investigation that revealed TikTok employees in China controlled and routinely accessed private data from US TikTok users between September 2021 and January 2022.
Storing data from over 100 million US TikTok users will be a boon for Oracle, which was once one of the world’s biggest data hosts but has struggled to catch up after rivals Amazon $AMZN and Microsoft $MSFT made early breakthroughs in cloud computing and took control of more than half the market between them.
In August 2020, Trump made a (legally and practically dubious) threat to ban TikTok in the US, citing worries that the Chinese government would use the data TikTok gathered to spy on US citizens. By September, the Trump administration had engineered a deal in which TikTok parent company ByteDance agreed to sell a minority stake in the social media app to two “very American” companies, Oracle and Walmart $WMT, with Oracle taking over TikTok’s US data storage.
After Trump lost the 2020 election in November, the TikTok deal entered a period of limbo and eventually fell apart when US president Joe Biden took office. Biden revoked a Trump executive order banning TikTok in June 2021, but then launched his own investigation into the app’s data practices.
By March 2022, ByteDance and Oracle had renewed negotiations for Oracle to take over TikTok’s US data storage, this time to allay the Biden administration’s privacy concerns. After BuzzFeed detailed how the company’s China-based employees controlled access to US TikTok users’ data in June, TikTok quickly announced all US private data—including users’ phone numbers, birthdays, and draft videos—are being stored in Oracle’s servers. The company also said it hired Oracle to “develop data management protocols that Oracle will audit and manage to give users even more peace of mind.”
BuzzFeed, however, reports that ByteDance employees in Beijing will still have access to public data about US users’ videos, comments, and bios, allowing them to draw inferences about Americans’ interests and politics.
