Oracle (ORCL.US) will continue its cloud partnership with TikTok under a new agreement approved by the US and China, reflecting the achievement of a key political and business “framework” for the app's continued presence in the United States.
TikTok must complete the ownership change by mid-September or risk withdrawal from the US market, with a possible extension of the deadline. Analysts believe that under Oracle's umbrella, TikTok will gain operational security and availability in a key market, and Oracle's possible purchase of the platform is considered a stock market “game changer.”
But that's not all, because the Trump administration has just confirmed the conclusion of a framework agreement with China, which provides for the takeover of TikTok's US operations by a US-controlled entity. The process will be finalized during Friday's conversation between Trump and Xi Jinping, and the whole thing could be completed within 30-45 days if there are no further delays or legal obstacles. New American companies are expected to join the group of major investors, which means that TikTok may be sold to a “group of very large companies,” which Trump will announce in the coming weeks as the official buyer. Oracle itself remains one of the candidates for the acquisition. The negotiations were conducted under pressure from the upcoming deadline for TikTok's withdrawal from the US market, hence the pace and determination of both sides were very high. Details regarding ByteDance's final shares, the division of algorithms, and the impact on soft power remain to be determined, but the priority is to meet US national security requirements and ease tensions in trade relations.
CNBC's Jim Cramer recommends buying shares in the company that will ultimately acquire TikTok, highlighting the platform's enormous advertising potential compared to Amazon and Google, as well as its unparalleled effectiveness in targeting audiences. Bloomberg experts point out that the final completion of the transaction may require a broader consortium of companies, not just one, but the entire agreement already gives Oracle significant control over the application's data and algorithms.
Oracle shares are up today nearly 2.7% before the opening of today's session, after also rising 3.4% yesterday.
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