Oracle says US ban of TikTok would hurt its profits
Software giant Oracle warned investors that a US ban of TikTok will likely damage its bottom line if it takes effect.
In April, Congress passed a bill that would require TikTok’s Beijing-based parent ByteDance to divest from the app entirely within 12 months or face a total US ban.
Oracle, co-founded and chaired by billionaire tech executive Larry Ellison, said the law “will make it unlawful to provide internet hosting services to TikTok,” Oracle said in its annual report published Monday.
“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 said in the report.
“Compliance with these laws may increase our expenses as we engage specialized or other additional resources to assist us with our compliance efforts,” the company added.
Oracle provides cloud infrastructure support for TikTok. The firm partnered with TikTok on a data security initiative called “Project Texas” as part of a failed effort to dispel Congress’s concerns about the security of US user data.
The TikTok partnership may contribute anywhere from $480 million to $800 million in annual revenue for Oracle, according to estimates from Evercore ISI analyst Kirk Materne cited by Bloomberg.
Oracle shares were flat in Tuesday morning trading. The stock is up more than 33% since the start of the year.
Oracle came close to buying TikTok as part of a joint bid with Walmart during a previous attempt by the Trump administration to ban the app in the US. The talks were scuttled in 2021.
As The Post has reported, Oracle is seen as a logical candidate to acquire TikTok this time around if ByteDance is eventually forced to divest. So far, Oracle has yet to comment on whether it would be interested in such a deal.
TikTok has argued the divestiture bill violates the First Amendment and is a de facto ban on the app.
In its lawsuit, the company argued the 12-month sale timeline is “simply not possible: not commercially, not technologically, not legally.”
The company has said it has no plans to seek a sale, even if it were possible.
Meanwhile, former US Treasury Secretary Steven Mnuchin is among those who have expressed interest in buying TikTok. Mnuchin has been pitching potential partners on a plan to rebuild the app’s recommendation algorithm from scratch in the US.
