Oracle (ORCL) shares jumped roughly 8% Friday after the cloud computing company confirmed it will join a group of investors set to lead TikTok’s U.S. operations, a move that eases national security concerns and removes a major overhang for the popular social media platform. The rally marked a sharp reversal for Oracle stock, which has faced heightened volatility in recent weeks amid broader uncertainty around artificial intelligence infrastructure spending.
According to an internal memo sent to employees, TikTok’s U.S. business will be operated through a new joint venture that includes Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment group MGX. The deal is expected to close on January 22 and is designed to comply with U.S. legislation requiring ByteDance, TikTok’s China-based parent company, to divest control of the app’s U.S. operations.
The agreement effectively prevents a potential shutdown or ban of TikTok in the United States, which had loomed after President Joe Biden signed legislation mandating divestiture over national security concerns. President Donald Trump previously extended deadlines for a deal multiple times and approved a potential framework through an executive order earlier this year, setting the stage for the current agreement.
Under the terms outlined in the memo, Oracle will play a critical role in ensuring compliance with U.S. national security requirements. The company will be responsible for auditing and validating that TikTok adheres to agreed-upon safeguards, including how sensitive U.S. user data is handled and stored. Oracle’s cloud infrastructure will house this data, reinforcing the company’s position as a trusted enterprise technology provider.
While China has not formally confirmed the transaction, reports from Chinese state media suggest the deal is expected to move forward. Commentary cited by CNBC indicates the structure aligns with Chinese regulations and does not constitute a sale of TikTok’s core recommendation algorithm, a key sticking point in past negotiations.
Investors responded positively to the announcement, viewing it as both a strategic win and a stabilizing development for Oracle. In a note to clients, Evercore ISI described the move as a “nice win” for the cloud provider, highlighting potential upside as the market reassesses Oracle’s longer-term growth outlook. The firm suggested that the recent pullback in shares may present an attractive entry point for investors with a six- to twelve-month time horizon.
The TikTok news arrives after a turbulent period for Oracle stock. Shares have been pressured by concerns over the sustainability of the artificial intelligence trade and the capital intensity required to build out large-scale AI data centers. Earlier this week, Oracle shares slid following reports that negotiations over a $10 billion data center deal with Blue Owl Capital had stalled, amplifying investor anxiety about funding risks tied to AI infrastructure expansion.
Despite Friday’s rally, Oracle stock remains down more than 20% over the past month, reflecting the market’s reassessment of high-multiple tech names. Year to date, however, shares are still up about 8%, underscoring the company’s ability to rebound when strategic clarity emerges.
Oracle’s involvement in TikTok’s U.S. operations reinforces its growing role at the intersection of cloud computing, data security, and large-scale digital platforms. While questions around AI spending persist, the TikTok partnership offers a timely boost to sentiment and highlights Oracle’s relevance in high-profile, mission-critical technology deals.