Tag: Oracle

  • Bumpy TikTok Handover Leaves US Cut Off from Global Market

    Bumpy TikTok Handover Leaves US Cut Off from Global Market

    Key Takeaways

    1. TikTok’s US operations transitioned to TikTok USDS Joint Venture LLC on January 23, 2026, but faced significant issues post-handover.
    2. A new privacy policy requires US users to agree to expanded data collection, including exact location tracking and user activities beyond the app.
    3. Technical difficulties arose after the transition, with users experiencing login issues and delays in video uploads, attributed to a data center power outage.
    4. The new management promises to maintain interoperability for US users while retraining the algorithm with local data to mitigate security concerns.
    5. There is uncertainty about the app’s appeal after replacing the original ByteDance algorithm with an American alternative.

    The transfer of TikTok’s US operations to the newly formed TikTok USDS Joint Venture LLC occurred on Friday, January 23, 2026, signaling a significant moment for the short video platform. Despite the involvement of partners like Oracle, Silver Lake, and Abu Dhabi’s MGX, the transition has not gone as planned. While President Donald Trump hails the arrangement as a victory, numerous media sources in the US are highlighting serious technical glitches alongside backlash against the updated terms of service.

    Privacy Policy Changes

    According to The New York Times, users in the US will now be required to agree to a modified privacy policy upon their first login. This new policy allows the app to gather not only approximate locations but also exact locations of users, given the necessary permissions. Additionally, the scope of data collection for targeted ads has greatly increased, incorporating user activities beyond the TikTok app itself. Future interactions with generative AI will also be recorded and analyzed systematically.

    Technical Difficulties After Handover

    The first weekend following this ownership transition saw a host of technical challenges. Reports from The Verge noted that users faced difficulties logging in and uploading their videos. Many users found their clips stuck in a review process for extended periods, while users outside the US did not encounter similar issues. TikTok USDS attributed these complications to a power outage at a data center in the US, though rumors are circulating online about potential censorship linked to ongoing protests in Minneapolis.

    Promises of Interoperability

    One of the main commitments from the new management is to maintain interoperability, allowing US users to access global content. However, the algorithm for US users will undergo a complete retraining using local data to address security worries regarding Chinese influence. It remains uncertain whether the app will keep its distinctive appeal once the original ByteDance algorithm is replaced with an American alternative.

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  • TikTok to Sell US Operations to American Investor Group

    TikTok to Sell US Operations to American Investor Group

    Key Takeaways

    1. ByteDance has finalized a deal to keep TikTok operational in the US by creating a new entity, TikTok USDS Joint Venture LLC.
    2. The new structure allows TikTok’s US operations to be managed independently from ByteDance starting January 22.
    3. The joint venture has agreements with three main investors: Oracle, Silver Lake, and MGX, with MGX indicating some non-American ownership.
    4. The ownership breakdown includes Oracle, Silver Lake, and MGX owning about 45%, ByteDance owning 19.9%, and affiliates of ByteDance investors owning roughly 30.1%.
    5. TikTok plans to retrain its algorithm using American user data to avoid external content manipulation, though details on implementation remain unclear.

    TikTok users in the US can now feel a sense of relief, as ByteDance has finalized a deal that ensures the app will remain operational in the nation. According to CNBC, ByteDance has decided to place TikTok’s US operations under a new framework that gives majority control to a group of investors led by American companies.

    New Structure for US Operations

    Shou Zi Chew, TikTok’s CEO, shared with employees that the US sector of the company will be managed by a newly created entity called TikTok USDS Joint Venture LLC. This arrangement enables TikTok to serve its 170 million users in the US while officially disconnecting its American operations from ByteDance’s direct oversight. The new agreement is scheduled to commence on January 22, just one day before the expiration of an executive order that halted the enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act.

    Investor Agreements

    In his internal communication, Chew noted that the joint venture has secured agreements with three managing investors: Oracle, the private equity firm Silver Lake, and the investment firm MGX based in Abu Dhabi. While this group of investors is often referred to as US-led, MGX’s involvement indicates that the ownership is not entirely American. Nevertheless, this is largely the same coalition that US officials previously showed willingness to approve during earlier talks that were hindered by political and regulatory concerns.

    Ownership Breakdown

    According to the reported ownership details, Oracle, Silver Lake, and MGX will collectively possess around 45% of the new US entity. Affiliates of current ByteDance investors are expected to own roughly 30.1%, while ByteDance itself will keep a 19.9% share. The company will also function under a new board structure, comprising seven directors, with a majority anticipated to be US citizens.

    One of the most delicate aspects of the negotiations has consistently been TikTok’s algorithm. US officials have long maintained that oversight of the recommendation system could enable indirect influence over the content presented to users. In his message to staff, Chew indicated that the new US entity will retrain the algorithm utilizing American user data to ensure that the content feed is not subject to external manipulation. How this retraining will be implemented in reality, and the degree to which it will be independent from ByteDance’s global systems, is still unclear.

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  • Tech Companies’ Debt Reaches $1.35 Trillion Amid AI Boom

    Tech Companies’ Debt Reaches $1.35 Trillion Amid AI Boom

    Key Takeaways

    1. The debt of the largest tech firms has quadrupled over the last decade, reaching approximately $1.35 trillion.
    2. The surge in debt is largely driven by aggressive investments in AI infrastructure to meet rising demand for AI services.
    3. Companies like Oracle are accumulating significant debt, with a debt-to-equity ratio indicating they owe much more than their equity value.
    4. The shift towards AI requires costly physical infrastructure, often consuming potential profits and leaving many companies in debt without sufficient revenue.
    5. There are significant risks in the tech sector, as rapid investments in AI may lead to challenges for financially weaker companies if funding slows down.

    The A.I. bubble has grown into a massive entity that might be ready to burst.

    A recent study by QUICK FactSet indicates that the interest-bearing debt of the 1,300 largest tech firms globally has increased four times over the last decade, as reported by Nikkei Asia. This results in total loans, bonds, and other liabilities amounting to around $1.35 trillion.

    The AI Race and Its Consequences

    The surge in debt is believed to be linked to the competitive race in artificial intelligence (AI). As companies strive to meet the rising demand for AI services, they are also investing heavily in the costly hardware and infrastructure needed to support these services.

    Certain companies are heavily in debt. For instance, Oracle has committed to a $500 billion investment in AI infrastructure in collaboration with OpenAI over the next four years, but it currently has debts exceeding $111 billion. This amount is more than double what Oracle owed a decade ago. Consequently, the company’s debt-to-equity ratio (DTE) is now at 4.6, indicating that for every dollar of shareholder equity, the company owes $4.6.

    Shifting Financial Dynamics

    This surge in debt is a stark contrast to the tech landscape from ten years ago, where tech firms primarily relied on software assets that usually generated solid profits. The recent shift towards AI, along with its need for physical infrastructure, has consumed the potential profits from many AI-focused tech companies. Essentially, those investing heavily in AI are often not yet making profits. They are accumulating significant debts without their revenues sufficiently covering them.

    This approach to debt impacts not just AI developers but also those indirectly involved. For instance, Nikkei mentions that Nvidia is “preferentially supplying [CoreWeave] with graphics processing units.” CoreWeave, which offers cloud-based AI services, needs powerful silicon for its operations and is taking on considerable debt to support this. The company’s DTE ratio stands at 3.8, putting it and Nvidia in a precarious position should CoreWeave face financial difficulties. If CoreWeave struggles, Nvidia’s business would also be adversely affected.

    Risks Ahead in the Tech World

    Yoshinori Shigemi from Fidelity International, as cited by Nikkei, believes that this business model could lead to significant challenges within the tech sector. He stated:

    “Companies are rapidly making upfront investments to ensure they are not left out of the AI boom. While funding is flowing well right now, a bottleneck could spell disaster for financially weak companies.”

    Running a business on leverage is often a gamble with high risks and potentially high rewards. It will soon become clear which side of this bet the tech industry will land on.

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  • TikTok Avoids Ban as ByteDance and Xi Agree on US Operations

    TikTok Avoids Ban as ByteDance and Xi Agree on US Operations

    Key Takeaways

    1. TikTok has avoided a ban in the US by allowing ByteDance to give up control over its American operations, algorithms, and user data.
    2. The “Protecting Americans from Foreign Adversary Controlled Applications Act” increased pressure on TikTok, citing national security concerns.
    3. TikTok’s US operations will be transferred to a joint venture mainly owned by American individuals, with ByteDance holding less than 20% ownership.
    4. Oracle will oversee TikTok’s security in the US, managing user data and content moderation decisions within American facilities.
    5. This change allows for greater access by security agencies to user activities and gives President Trump potential oversight of politically targeted advertisements on the platform.

    TikTok has dodged a ban in the United States after ByteDance, its parent company, agreed to give up control over its American operations, algorithms, and user data. This decision comes after a deal between Chinese leader Xi and former President Trump was reached on the issue.

    Background of the Situation

    The pressure on TikTok increased when President Biden enacted the “Protecting Americans from Foreign Adversary Controlled Applications Act” (H.R. 7521) in April 2024, which aimed to force the app out of the US market. The main concern was that the foreign ownership and control of the app posed a threat to national security because of how user data could be accessed.

    Following a series of appeals and extensions, President Trump issued an executive order on September 25, 2025, prolonging the potential ban for an additional 120 days. He received confirmation that it was possible for TikTok’s US operations to be transferred, which would allow the process to proceed smoothly.

    Details of the Divestiture

    The plan involves transferring TikTok’s US operations to a joint venture primarily owned and managed by American individuals. ByteDance can keep less than 20% ownership, while unnamed investors will hold the rest.

    Oracle has been selected to oversee the security of TikTok in the United States. Moreover, all algorithms, code, and decisions regarding content moderation will fall under American oversight. User data will also be stored in facilities located within the US, which will be managed by Oracle.

    Implications for User Privacy and Control

    This divestiture marks a significant moment, as it transforms the only widely used foreign social media platform in the US to one that is under American control. This change will allow security agencies to have complete access to user activities, similar to how the NSA can monitor communications from US cellular companies. It could also provide President Trump the power to review any algorithms linked to politically targeted advertisements on TikTok in the US market.

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  • TikTok Creating US-Only Version of the App: Report

    TikTok Creating US-Only Version of the App: Report

    Key Takeaways

    1. TikTok is developing a US-specific version of its app, called “M2,” in response to US legislation regarding foreign-controlled applications.
    2. American users will need to download this new version to continue using TikTok, with a transition period lasting until March 2026.
    3. The new app aims to comply with US legal standards while allowing ByteDance to retain control in other areas, particularly regarding algorithms.
    4. A law requires TikTok to divest its US operations by January 19, 2025, or face a ban, with previous delays from President Trump.
    5. The new app could facilitate a sale of TikTok’s American business without transferring the algorithm, potentially satisfying US regulations and keeping the platform operational.

    According to a fresh report from The Information, TikTok is working on a version of its app specifically for the US as it approaches a potential agreement with an American partner.

    Response to Legislation

    This move comes as a direct reaction to the “Protecting Americans from Foreign Adversary Controlled Applications Act.” Internally, this initiative is referred to as “M2” and is expected to launch in early September. Once it becomes available, American users will need to download this new version of the app to keep using TikTok, with a transition phase lasting until March 2026.

    Details of the New App

    The exact ways that this US-only version will be different are still unclear, but it’s assumed that TikTok’s parent company, ByteDance, is trying to keep full control in other areas while complying with US legal standards. These standards involve restrictions on foreign ownership and governance of the platform’s algorithms.

    News about this new application comes after President Trump announced he has a buyer ready for TikTok, described as a group of “very wealthy people.” The suggested deal would allow a collection of non-Chinese investors, including Oracle, to take a majority share in TikTok’s American business, with ByteDance keeping a minority share.

    Legislative Timeline

    A law signed by President Biden mandates the platform to divest by January 19, 2025, or face a ban in the US. President Trump has delayed this required sale three times. Any agreement still requires approval from the Chinese authorities, who have firmly stated that TikTok’s algorithm cannot be sold along with the app.

    This new app might be a solution that enables a sale without granting full access to the algorithm, which could satisfy US regulations while detaching the American operations from the main app.

    Future Outlook

    While there are not enough details to predict exactly how everything will play out, there are several indicators that suggest a resolution is on the horizon that allows TikTok to remain available in the US.

    With President Trump indicating that a buying group is nearly approved and TikTok preparing a distinct US access point, which is set to launch around the same time the current executive order extension expires, it seems a deal is becoming more likely.

    If the new version can maintain the engaging aspects of the current algorithm, it could lead to a favorable outcome for everyone involved.

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