When news broke last month that Oracle, as part of a consortium including Silver Lake, is set to control about 80% of TikTok’s U.S. operations, we were not surprised. Having written extensively on the matter, we understood immediately that the deal, driven largely by U.S. government concerns over data security, would mean a huge expansion of Oracle’s dubious influence. Overseeing TikTok’s U.S. user data from Texas, Oracle is set to move from “just” being an ERP vendor to becoming royalty in the kingdoms of both social media and global data security. What might this mean for the software industry as a whole and, as importantly, for the average Oracle ERP licensee?
Several years ago, we covered Oracle’s unexpected interest in TikTok. In our blog series, we explained that Oracle’s departure from its relatively low public profile portfolio of business-facing enterprise software and foray into a TikTok deal was a strategic one and on par with its history of aggressive licensing tactics, coercive cloud deals, and litigation sleight of hand. We noted that Oracle’s interest was not solely about business strategy: Oracle co-founder (and largest shareholder) Larry Ellison’s political savvy and cozy relationship with President Trump gave Oracle the appearance of being TikTok’s “safest” choice for a U.S. partner.
We highlighted how Ellison’s lobbying coupled with Trump’s very public TikTok embarrassment led to a proposed agreement that would give Oracle total control of TikTok’s U.S. operations. We concluded at the end of our series that TikTok was simply another stepping stone in Oracle’s much-needed strategy to bolster its then-weak cloud position and warned that Oracle software licensing customers could ultimately pay the price for Oracle’s ambitions.
China's ByteDance, the owner of TikTok, has been under pressure from the U.S. for years to divest its U.S. business or face a U.S. shutdown. On September 25, 2025, the Trump administration signed an executive order "essentially declaring that the terms of this deal meet America's national security needs" and meet legal requirements. The order gives a deadline of mid-January, 2026 for negotiators to finalize a deal.
Through this pending arrangement, Oracle will oversee the data security of U.S. TikTok operations. As well, TikTok’s most valuable asset, its content algorithm, will be licensed from China and retrained on U.S. data with Oracle managing how the algorithm works, its updates, and the storage of Americans’ data. According to CNN:
The new ownership group will control the algorithm only for US users — again raising the question about whether American users will have to download a new, separate app after the deal is complete.
Oracle and the private equity firm Silver Lake will be the primary investors in the deal. Dell Technologies as well as Fox Corp. were also identified as investors in the deal. While it could be some time before the deal is inked, White House officials said that the previous TikTok deadline would be extended for another 120 days to give ample time for the finalization.
Of note is the surprise move that Oracle CEO Safra Catz will step down and be replaced by co-CEOs Clay Magouyrk and Mike Silica:
Catz will become vice chair of Oracle’s board of directors. It’s not clear if the transition is related to the TikTok deal; however, the move could free up Catz, also a Trump ally, to take on a leadership role in the new joint venture.
Of course, any commentary on Catz’s next steps is just speculation at this point, but the timing is certainly interesting.
Stay tuned for Part 2, where we give our best analysis as to how the TikTok deal might benefit Oracle.
Published on October 7, 2025
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