oracleThe company’s stock rose 7% on Friday after the cloud provider joined a group of investors set to lead TikTok’s U.S. operations.
CEO Shou Zi Chew said in a memo to employees Thursday that the social media company’s U.S. division will be run by a joint venture that includes Oracle, Silver Lake and Abu Dhabi-based MGX. The deal is expected to close on January 22nd.
The agreement protects the popular social platform from being banned after President Joe Biden signed legislation mandating the sale of the company’s U.S. division, citing national security concerns.
President Donald Trump has repeatedly extended the deadline for the deal, and in September signed an executive order approving a potential sale plan for China-based ByteDance.
According to the memo, Oracle is tasked with auditing and verifying that TikTok complies with “agreed national security provisions.”
China has not officially recognized the investment deal, but reports in Chinese state media suggest a deal is on the way, said CNBC’s Eunice Yun. State media quoted a pro-Beijing professor as saying the deal was in line with Chinese law and “not a sale of algorithms.”
The company’s cloud-based computing centers will also store sensitive U.S. data.
Evercore ISI said in a note to customers on Friday that the news was a “great win” for a cloud company with upside potential.
“We continue to believe that the recent pullback presents an interesting entry point for investors with a 6-12 month view,” the analysts said.
The deal comes after a chaotic end to 2025 for cloud providers and a sharp decline in stock prices in recent months due to concerns over spending on AI infrastructure.
Shares fell earlier this week after reports that negotiations over a $10 billion data center contract with Blue Owl Capital had stalled. This further exacerbated concerns about the huge and potentially risky financial plans behind building artificial intelligence data centers.
Oracle stock has risen 8% since the beginning of the year, but has fallen more than 20% in the last month.
Oracle’s 1 month stock price chart.
