Oracle stock jumped over 5% in extended trading. The surge followed reports that ByteDance, TikTok’s parent company, signed an agreement to form a U.S. joint venture. The consortium includes Oracle, private equity firm Silver Lake, and MGX, the sovereign-wealth fund arm of Abu Dhabi.
The venture aims to address U.S. national security concerns and prevent a ban of the social media app. The new entity will manage data protection, content moderation, and commercial activities for TikTok’s U.S. operations.
Analysts suggest the move secures TikTok as a key, high-margin customer for Oracle Cloud Infrastructure (OCI). This provides a significant boost to OCI outside of its AI-related ventures. The transaction targets closure by the end of January but requires approval from the Chinese government.