As Oracle seeks US approval of a landmark partnership with the short-form video app TikTok, experts say questions will intensify over Trump’s political relationship with Oracle chairman and co-founder Larry Ellison.
One of the richest men in the world, Ellison has built extensive bridges with Trump. He has vocally expressed support for the president and reportedly hosted a large fundraiser for him this year, where donors who paid $ 100,000 were offered a chance to play golf with Trump.
Oracle did not respond to requests for comment. The White House declined to comment.
Trump raised eyebrows last month when he publicly supported the prospect of a deal involving TikTok and Oracle. At the time, Oracle and Microsoft had competed to acquire TikTok, with Microsoft widely regarded as the frontrunner. Oracle, experts said, lacked experience in consumer services and offered no products in social media.
But on Sunday night, sources told CNN that TikTok’s Chinese parent company, ByteDance, had been on Oracle over Microsoft. Oracle and Treasury Secretary Steven Mnuchin confirmed the proposed deal on Monday. In a statement, TikTok said it believed the proposal would “solve the administration’s security issues.”
Administration officials have been complaining for several months that TikTok poses a risk to national security because of its current ownership of a Chinese company. TikTok has denied these allegations, saying that it stores all US users’ data outside of China and that the information is not subject to Chinese law; cybersecurity experts have said there is no evidence that TikTok has been compromised by Chinese intelligence.
Oracle’s proposed partnership with TikTok is still to be reviewed by the US government. And it remains unclear whether those talks will be resolved before a Trump administration ban on TikTok takes effect on September 20, though Mnuchin said the government will investigate the deal this week.
Asked whether Ellison’s ties to Trump were a factor in the proposed deal, a person familiar with the negotiations insisted it was “a business decision, not a political decision.”
But external analysts said it is impossible to distinguish one from the other given Trump’s personality. Trump has a track record of injecting himself into seemingly neutral public policy processes. For example, Trump seemed to be intervening in a multi-billion dollar cloud contract decision that many expected Amazon to win; in the end, and after a quiet press campaign from Oracle, the Pentagon awarded the deal to Microsoft. In another carefully reviewed case, Trump promised to block AT & T’s acquisition of Time Warner (now WarnerMedia, CNN’s parent company). The announcement surprised experts because antitrust assessments of mergers are expected to occur independently of the president’s influence.
As the Oracle-TikTok negotiations progressed, some reports highlighted how Microsoft has wisely built its own relationship with the Trump administration.
Still, Microsoft’s connections were no match for Ellisons, said Eric Schiffer, president of the Patriarch Organization, a technology-focused private equity firm.
“Microsoft has done everything they could possibly do except show up at a meeting with a MAGA hat to win this,” Schiffer said. “There’s no doubt that the conventional wisdom was that Microsoft was strategically positioned after making big political cuts in the administration and playing politics with Trump pretty well compared to most companies. But not as well as Larry.”
Other experts said that while Ellison’s ties to Trump may have given Oracle an advantage, by the end of the day, the proposal should still adequately address the U.S. government’s national security concerns.
Sources have described the proposal as halting a direct sale of TikTok to Oracle, a detail that could conflict with Trump’s Aug. 14 announcement that required a complete divestiture, said Harry Broadman, a partner in the Berkeley Research Group and a former member of the Committee on Foreign Investment of the United States, the governmental body that makes certain offers that can give a foreign investor control over a US company.
“Yes, Larry Ellison is friends with Trump, and maybe that will mean something I do not know,” Broadman said. “But there are executive orders out there, and people will look at how this fits in with what executive orders say.”
Whether the Oracle agreement has a security pattern depends a lot on the agreement, says Alex Stamos, the former head of security at Facebook.
“An agreement where Oracle takes over hosting [of TikTok’s data] without source code and significant operational changes would not address any of the legitimate concerns surrounding TikTok, and the White House, which accepted such an agreement, would demonstrate that this exercise was pure handling, “Stamos tweeted.