Oracle Warns of Potential Impact from TikTok Ban

Oracle acknowledged in its annual report that a U.S. ban on TikTok could negatively affect its business. President Biden has demanded that TikTok's owner, ByteDance, sell the app within nine months to avoid a ban due to concerns about user data being accessed by China.

Oracle provides cloud services for TikTok, which has over 150 million U.S. users. If these services are disrupted, Oracle's revenues and profits could suffer. This concern dates back to 2020 when former President Trump pushed for TikTok's U.S. assets to be sold, leading to Oracle's involvement in ByteDance’s proposal to keep TikTok operational in the U.S. via Project Texas.

TikTok has since filed a lawsuit, arguing that the forced sale violates First Amendment rights. Potential buyers for TikTok, such as Frank McCourt and Steven Mnuchin, have shown interest, but no deal has been finalized. Analysts estimate TikTok might spend $480 million to $800 million annually on cloud infrastructure, a significant portion of Oracle’s $6.9 billion cloud revenue.