Oracle’s proposal for dealing with Donald Trump’s TikTok “problem” does not include a payment to the US, according to reports out Tuesday afternoon.
If true, this appears to preclude the kind of Bonanno-style shakedown the president suggested should be part of ByteDance’s forced divestiture. Trump, you’ll recall, claimed the US should receive a cash payment from the buyer, although it’s never been clear under what authority such a demand could be made.
Once it became apparent that Oracle, not Microsoft, would become TikTok’s chosen “technology partner”, The White House’s claim to what, on a generous interpretation, might be described as a “finder’s fee”, seemed even more inappropriate given Larry Ellison’s avowed support for Trump.
Rather than go the old fashioned rout by just pulling up to the back door of The White House in a Fleetwood Brougham and handing Larry Kudlow a briefcase full of cash and a gym bag with two dozen hot Rolexes, Oracle will instead “try to sway Trump with the promise of 20,000 new TikTok jobs”, Bloomberg reported.
The details came around an hour after The Financial Times said the plan is for ByteDance to put TikTok’s global business into a newly created US company with Oracle as a minority shareholder.
“As part of the proposal, Oracle will have a stake in the whole of TikTok and not just the US operations, while ByteDance… will be the majority shareholder of the new entity”, FT went on to report, adding that Walmart may still participate via a minority stake.
This seems broadly consistent with Steve Mnuchin’s comments to CNBC Monday, when the Treasury secretary teased something called “TikTok Global”, which Mnuchin described as “a US-headquartered company with 20,000 new jobs”.
Apparently, the new company will not be overseen by ByteDance, but TikTok’s Chinese parent will retail control of the algorithm in keeping with SCMP‘s reporting, which suggested that Beijing will use revisions to an export control list to ensure key AI technology is not transferred to a US company.
Oracle will process TikTok’s data, sources said, adding that information on American users will be stored stateside.
Trump will naturally be inclined to take the opportunity to claim he effectively created 20,000 US jobs by extorting a Chinese company. That’s a narrative that will probably go over well at rallies headed into the election.
Amusingly, it turns out that ByteDance had already discussed this kind of arrangement with Microsoft long before Trump took aim at TikTok.
In their coverage, FT dryly notes that “the involvement of Ellison and Oracle chief Safra Catz, some of the few executives in Silicon Valley to openly support the Trump administration, is also likely to play well with the president”.
Indeed. All that’s missing is the cash payment from the buyers. Maybe that’ll be more of a quid pro quo. I can just hear it now…
Congratulations on a great victory. We all watched and you did a terrific job. The way you came from behind – somebody who wasn’t given much of a chance, and you ended up winning easily. It’s a fantastic achievement. Congratulations.
You are absolutely right Mr. President. We did win big and we worked hard for this.