TikTok nears Oracle deal in bid to allay U.S. data concerns

The agreement would come a year and a half after a U.S. national security panel ordered ByteDance to divest TikTok.

TikTok is nearing a deal for Oracle Corp to store its U.S. users' information without its Chinese parent ByteDance having access to it, hoping to address U.S. regulatory concerns over data integrity on the popular short video app, people familiar with the matter said.

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The agreement would come a year and a half after a U.S. national security panel ordered ByteDance to divest TikTok because of fears that U.S. user data could be passed on to China's communist government.

That order was not enforced after Joe Biden succeeded Donald Trump as U.S. president last year. The panel, however, known as the Committee on Foreign Investment in the United States (CFIUS), has continued to harbour concerns over data security at TikTok that ByteDance is now hoping to address, the sources said.

It is not clear whether CFIUS will find that TikTok's partnership with Oracle will resolve the national security issues it has identified, the sources said. A spokesperson for the U.S. Department of the Treasury, which chairs CFIUS, did not immediately respond to a request for comment.

Oracle had discussed acquiring a minority stake in TikTok in 2020, when ByteDance was under U.S. pressure to sell the app. The cloud computing giant will store all of TikTok's U.S. user data on Oracle data servers under the new proposed partnership, the sources said. Some of TikTok's data is currently stored on Alphabet Inc's Google Cloud.

A dedicated U.S. data management team of hundreds of people acting as a gatekeeper for U.S. user information and ringfencing it from ByteDance will be set up under the agreement, the sources said. The team will be comprised of engineers and cyber security personnel. The companies are discussing a structure under which that team would operate autonomously and not be under TikTok's control or supervision, the sources added.