What's Happening?
Oracle is part of a consortium of companies that could enable TikTok to continue its operations in the United States, contingent upon a framework deal between the U.S. and China. This development follows a report by CBS News, which noted that the deal's structure remains unclear and involves multiple firms. The framework agreement aims to transition TikTok to U.S.-controlled ownership, a move set to be confirmed in an upcoming call between President Trump and Chinese President Xi Jinping. The urgency of the situation is underscored by a looming September 17 deadline, which could disrupt TikTok's operations in the U.S. if not extended. U.S. Treasury Secretary Scott Bessent indicated that the deadline might be extended by 90 days to finalize the deal, although specifics were not disclosed.
Why It's Important?
The potential deal is significant as it addresses national security concerns regarding TikTok's U.S. user data, which lawmakers fear could be accessed by the Chinese government. This has led to legislative actions requiring divestiture to prevent espionage or influence operations. With TikTok boasting 170 million U.S. users, the app's continued operation is crucial for its stakeholders, including Oracle, which stands to benefit from its involvement in the consortium. The deal could also impact U.S.-China relations, showcasing a collaborative effort to resolve data privacy issues while maintaining economic ties.
What's Next?
If the framework deal is finalized, it will require approval from the Republican-controlled Congress, which has previously passed legislation mandating divestiture due to security concerns. The upcoming call between President Trump and President Xi Jinping will be pivotal in confirming the agreement. Stakeholders, including Oracle and TikTok, will likely engage in further negotiations to solidify the terms of U.S.-controlled ownership. The extension of the deadline by 90 days provides a window for these discussions to take place, potentially averting disruption to TikTok's U.S. operations.
