Earlier this week we wrote about the absolute grift involved in the TikTok / Oracle deal. Contrary to the framing that this was Oracle "buying" TikTok to satisfy the President's unconstitutional demand that the Chinese company ByteDance sell TikTok to an American company, the story showed that this was just a hosting deal for Oracle's cloud service, which is way down the list of top cloud providers.
The end result was no actual sale (though the Treasury Department is still "reviewing" the deal), but a big contract for Oracle, and a bogus story in which the President can pretend he forced ByteDance to "sell" TikTok, even though it retains ownership in the company (there are some rumors that the hosting deal will include a small, and probably symbolic, equity stake for Oracle).
The other key point I noted in my article was that Oracle's executive leadership, starting with Larry Ellison, but including CEO Safra Catz, have been cozying up to Trump and the White House ever since Trump became President. While much of Silicon Valley's executive teams have made it quite clear how uncomfortable they are with a Trump Presidency, Oracle... has done the opposite. And while I framed it as being convenient that things worked out this way, a report from the Wall Street Journal highlights how this was the grift from day one.
Oracle was originally brought into the negotiations to provide an alternative to Microsoft Corp., a rival bidder with Walmart as a partner, said one person familiar with the talks. The U.S. investment firms Sequoia Capital and General Atlantic, which are existing investors in ByteDance, went in search of a tech company with close ties to the administration and settled on Oracle, the person said.
As we discussed earlier, from day one of this silly ordeal, the President made it clear he would steer a deal to a company he personally liked (meaning one where the leadership licked his boots, apparently). After all, after first saying that he was going to block TikTok in the US, as rumors of Microsoft's involvement came out, Trump immediately said that he would block a deal with Microsoft. Microsoft had to go grovelling to Trump over a weekend to have him say, grudgingly, they could continue to pursue a deal.
Then, of course, there's the Walmart story. Rumors came out that Walmart was a leading bidder, but Trump's White House stepped in and told them they would block that deal too, because it would show that Trump's figleaf "national security" explanation for banning TikTok was an obvious lie.
In other words, throughout this nonsense process, the President -- who at one point also demanded a finder's fee for any deal -- made it clear that this was about his own whims. He was forcing a sale, and he was going to pick a winner -- and the winner had to be someone he liked.
That doesn't seem like the kind of free market people appreciate. It seems like the very worst of a corrupt crony capitalist system.
The WSJ piece details how being corrupt this whole process was. It was all about stroking Trump's ego, and lining his campaign's bank account:
Sequoia Capital used its own connections to push the administration to allow TikTok to continue operating in the U.S., say people familiar with the discussions. Doug Leone, the firm’s global managing partner who took a lead role lobbying on TikTok’s behalf, has donated tens of thousands of dollars to Republican candidates this election season along with his wife, including to the president’s re-election campaign. Mr. Leone also held a reception at his Silicon Valley home for Secretary of State Mike Pompeo in January.
Ms. Catz’s relationship to Mr. Trump could give Oracle a leg up in getting the deal approved, according to people in contact with the White House. Oracle has worked for decades with the U.S. government, including multiple contracts with the national-security establishment.
Once again, this was nothing but performative nonsense from the President that ends in his own supporters lining their pockets. None of it seems to have anything to do with actual national security. It's a joke.
