Oracle-TikTok on thin ice as Trump advisers divided on deal

Trump's China hawks are not sold on Oracle

Despite support from Treasury Secretary Steven Mnuchin, Oracle’s proposed “trusted tech partnership” with TikTok to prevent a ban of the app in the U.S., faces stiff resistance from White House security advisers, including Secretary of State Mike Pompeo, FOX Business has learned.

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The pushback from White House officials complicates what some Oracle executives believed was a nearly done deal and likely to pass muster with the all-important Committee on Foreign Investment in the United States—an arm of the Treasury Department—that Mnuchin chairs.

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But as FOX Business was first to report, various Trump administration officials believe Oracle’s trusted partnership with TikTok fell short of the President’s stated goals when the TikTok imbroglio began in the summer. Without a break of U.S. operations from its Chinese parent company Bytedance, which the president claimed shares user data with the Communist Chinese Party for surveillance purposes, the president said he would ban the app from operation in the U.S.

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The president’s threats to ban the app through executive orders touched off a wild spree of deal speculation with tech giant Microsoft making a bid to purchase the U.S. operation of the app outright for $20 billion or more and totally secure the code and algorithms in its cloud. Further complicating matters, the Chinese government became unnerved by Trump’s comments the app was a spying tool and prevented any transfer of technology to a U.S. buyer like Microsoft—prompting that deal to be scuttled.

With that, the giant technology company led by Larry Ellison, a Trump friend and political supporter, Oracle stepped in to create a partnership with Bytedance to keep the U.S. operations of TikTok open to users through a joint venture where the companies would work together rather than Oracle purchasing TikTok outright. White House political advisers, Commerce Secretary Wilbur Ross, and importantly Mnuchin supported the Oracle idea and were poised to announce the deal could go through with CFIUS approval. But political pressure from anti-China hawks followed.

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Tiktok, the short video app, has grown wildly popular in the U.S, particularly amid the pandemic. The platform boasts 800 million monthly users globally, with 100 million of those users in the U.S. Given the popularity, some White House political advisers believe it is problematic to ban the app, especially during an election year.

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But the tide started to turn against the deal early Tuesday, as FOX Business first reported. Senator Marco Rubio (R-FL) and Senator Josh Hawley (R-MI), along with a consortium of other Republican senators said the deal did not pass muster and meet standards for US TikTok to be completely separated from its Chinese owner.

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Hawley, during a Wednesday appearance on Fox & Friends, specifically cited the lack of a firewall between the U.S. and China.

“It doesn't do enough to separate TikTok from Beijing. The big problem with TikTok is it is basically a spy apparatus for Beijing because all of the data that they can get from our phones can then be ships off to China. I want to make sure any deal puts up a firewall between China and Beijing on the one hand and customers on the others" he said adding it is "Just a licensing agreement for Oracle the American company to use TikTok's data and algorithm. That's not good enough. American consumers must be 100% protected” said Hawley during an appearance on Fox & Friends.

FOX Business was also first to report that Attorney General Bill Barr had misgivings as did Pompeo—causing any momentum to approve the deal to stall. It’s still possible the deal could be approved with Oracle and TikTok agreeing to additional measures to meet national security concerns.

Late Wednesday, Trump, during his press briefing, said he was expected to review the deal Thursday morning.

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