Oracle Admits Banning TikTok in the US Could Hurt Its Revenue and Profit

By Trisha Andrada

Jun 25, 2024 06:23 AM EDT

Oracle said a ban on TikTok in the United States might hurt its business, the software company admitted in its annual report on Monday, June 24. Over 150 million people in the US use TikTok, and Oracle provides cloud infrastructure for the short video platform.

"If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted," Oracle noted, according to CNBC.

TikTok Ownership Sparking Conflict Against US

For a long time, the ownership structure of TikTok has caused friction in the US because of worries that user data may end up in China.

In April, President Joe Biden signed a bill requiring Chinese firm ByteDance to sell its TikTok app in nine months, or a year if an extension is granted, to prevent it from being banned in the US.

TikTok challenged the US government by filing a lawsuit in May alleging that the law violated the free speech protections. Several app creators also claimed the law violated their rights under the First Amendment.

Although former Treasury Secretary Steven Mnuchin and real estate mogul Frank McCourt were reportedly interested in purchasing TikTok, no such transaction has occurred.

Oracle Helping TikTok Ease US National Security Concerns

Worries over TikTok's Chinese ownership had persisted since 2020 when then-president Donald Trump pushed to sell or divest the company's American assets. That sparked deal talks with Microsoft.

A few weeks later, Oracle joined ByteDance in proposing cloud services to the US Treasury Department, which could keep TikTok available in the US.

Project Texas, a campaign by TikTok, was initiated to ensure that the US-based Oracle cloud infrastructure continues to power TikTok services for American users.

TikTok also named Oracle the company that will compile and distribute the app to third-party app stores. In 2022, Oracle CEO Safra Catz assured investors and reporters that they have an excellent relationship with TikTok.