A U.S. ban of TikTok might hurt Oracle’s (NYSE:ORCL) business, the software company acknowledged in its annual report on Monday.
In April, President Joe Biden signed a bill demanding that China’s ByteDance sell TikTok in nine months, or one year if an extension is approved, if the short-video company wants to avoid a ban in the U.S. TikTok’s ownership structure has long been a source of tension in the U.S. due to concerns about user data making its way to China.
Oracle provides cloud infrastructure for TikTok, which has over 150 million users in the U.S.
Concern over TikTok and its Chinese ownership dates back to 2020, when Donald Trump, who was then president, pushed for a sale or divestiture of the U.S. assets. That pressure prompted deal talks with Microsoft (NASDAQ:MSFT). Weeks later, Oracle announced that it was part of ByteDance’s proposal to the U.S. Treasury Department to provide cloud services that could help TikTok remain available in the U.S.
TikTok moved forward with an initiative called Project Texas, designed to keep TikTok services for U.S. users running on Oracle cloud infrastructure located inside the country. TikTok said Oracle would also be responsible for compiling the app and delivering it to third-party app stores.
ORCL shares began Tuesday down two dollars, or 1.4%, to $137.89.
