Oracle is a rare creature: a tech giant that managed to stay completely in the good grace of President Trump. Well, that position could help get TikTok over Microsoft.
Between the lines: Typically, a company’s relationship with the president would have little bearing on who appears in competing M&A bids. But these are atypical times.
What’s happening: Oracle has held talks with other investors about placing a bid for TikTok, the Chinese-owned social video app that Trump intends to ban on national security grounds unless the new moon is sold to a U.S. company.
- Trump backed the idea of the deal this week, calling Oracle founder and Trump fundraiser Larry Ellison a “great man” and saying, “Oracle would certainly be someone who could handle it.”
- The development picks up Oracle against Microsoft, which is already in talks with both Beijing-based TikTok owner ByteDance and the White House over a deal. Other tech companies including Twitter have also been rumored to be potentially interested.
The catch: The White House has an unusual amount of say in choosing winners and losers in the competition for TikTok because of the mechanism for judging every proposed deal.
- The United States Foreign Investment Commission (CFIUS), composed of cabinet members and presidential advisers, will monitor TikTok’s ByteDance release to ensure that there are no ties between the two.
- CFIUS is also likely to review the other side of the deal, rejecting any transaction that, in its view, could fall into the hands of US TikTok users in Beijing’s hands.
Microsoft may be vulnerable on that front. The company has been doing business in China for decades and is the only major U.S. company to operate a search engine as a social network in China, with local versions of Bing and LinkedIn meeting digital censorship and user data requirements.
- “One of the few surviving search engines from America in China is Bing, and Microsoft owns it, so you know there’s some suspicious stuff going on,” White House Trade Advisor Peter Navarro told CNN earlier this morning. month. “The question is: will Microsoft be compromised?”
Oracle also does business in China, although last year its presence there for the most part scaled. That presence may be easier to overlook – or at least less painful for Oracle to disinvest – especially if the administration is already more inclined to make a deal with Oracle well than Microsoft.
- The administration may not force ByteDance to pursue a deal with one contractor over another, but it may make it clear to the parties involved what kind of deal is likely to happen and what will not.
The plot: TikTok would be an unusual fit for Oracle, whose business centers on enterprise cloud and database services.
- However, Oracle has grown significantly through acquisitions, including a growth spurt that saw it buy a host of companies large and small, including PeopleSoft, Siebel Systems and BEA Systems.
- Such acquisitions particularly affected Oracle’s mainstay of computer companies, although analysts suggest that Oracle may have found TikTok useful for collecting data, for example, to support its marketing solutions.
Be Smart: Among large tech companies, Oracle is almost uniquely sociable with Trump. (IBM and Apple have also cultivated close relationships, though Trump still has his spats with the latter.)
- Ellison is a Trump booster who hosted a high-dollar fundraiser for the president’s reelection campaign earlier this year, and Oracle’s CEO Safra Catz has been close to Trump since advising him during the presidency. inauguration.
- The Trump administration backed Oracle in a Supreme Court case against Google set up this fall for oral arguments. (The Obama administration had also supported Oracle’s position on the matter.)
- Yesterday last week broke the news that Labor Secretary Eugene Scalia had apparently pushed for a smaller settlement in a discrimination complaint against Oracle.
Meanwhile: Trump has already shown no compression over direct intervention in the TikTok deal – which of course only happens because of his threatening ban.
- He has repeatedly stated that the contractor should ensure that the U.S. Treasury receives a payday from each deal – a strange and unusual question – because, as he said Tuesday, “We make it possible.”
Go deeper: During the Trump era, Oracle keeps tech sway
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