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Illustration: Sarah Grillo/Axios

Oracle is a rare creature: a tech giant that's managed to remain fully in President Trump's good graces. Now, that position could help it end up acquiring TikTok over Microsoft.

Between the lines: Typically, a company's relationship with the president would have little bearing on who prevails in competing M&A bids. But these are atypical times.

What's happening: Oracle has been holding talks with other investors on putting together a bid for TikTok, the Chinese-owned social video app that Trump intends to ban on national security grounds unless it's sold to an American company by next month.

  • Trump endorsed the idea of the deal this week, calling Oracle founder and Trump fundraiser Larry Ellison a "tremendous guy" and saying, "Oracle would be certainly somebody that could handle it."
  • The development pits Oracle against Microsoft, which is already engaged in talks with both Beijing-based TikTok owner ByteDance and the White House on a deal. Other tech companies including Twitter have also been rumored to be potentially interested.

The catch: The White House has an unusual amount of say in picking winners and losers in the competition for TikTok because of the mechanism for reviewing any proposed deal.

  • The Committee on Foreign Investment in the United States (CFIUS), composed of cabinet members and presidential advisers, will review ByteDance's divestiture of TikTok to ensure that no ties remain between the two.
  • CFIUS will likely also review the other side of the deal, rejecting any transaction that, in its view, could allow U.S. TikTok users' data to fall into Beijing's hands.

Microsoft may be vulnerable on that front. The company has done business in China for decades and is the only major U.S. firm to operate either a search engine or a social network in China, with local versions of Bing and LinkedIn that comply with the country's digital censorship and user data demands.

  • "One of the few surviving search engines from America in China is Bing, and Microsoft owns that, so you know that there's some suspicious stuff going on there," White House trade adviser Peter Navarro told CNN earlier this month. "The question is, is Microsoft going to be compromised?"

Oracle also does business in China, although it majorly scaled back its presence there last year. That presence may prove easier to overlook — or at least less painful for Oracle to be forced to divest — particularly if the administration is already more inclined to OK a deal with Oracle than Microsoft.

  • The administration can't force ByteDance to pursue a deal with one acquirer over another, but it can make it clear to the parties involved what sort of deal is likely to pass muster and what isn't.

The intrigue: TikTok would be an unusual fit for Oracle, whose business centers on enterprise cloud and database services.

  • Nevertheless, Oracle has grown considerably through acquisition, including a growth spurt that saw them buy a host of companies large and small including PeopleSoft, Siebel Systems and BEA Systems.
  • Such acquisitions mainly fed Oracle's main enterprise computing business, though analysts suggest Oracle could find TikTok useful for, for instance, collecting data to support its marketing solutions.

Be smart: Among major tech companies, Oracle is almost uniquely cozy with Trump. (IBM and Apple have also cultivated close relationships, although Trump has still had his spats with the latter.)

  • Ellison is a Trump booster who hosted a high-dollar fundraiser for the president's reelection campaign earlier this year, and Oracle CEO Safra Catz has been close to Trump since advising him during the pre-inauguration transition.
  • The Trump administration backed Oracle in a Supreme Court case against Google set for oral arguments this fall. (The Obama administration had also supported Oracle's position in the case.)
  • Just last week, news broke that Labor Secretary Eugene Scalia had allegedly pushed for a smaller settlement in a discrimination complaint against Oracle.

Meanwhile: Trump has already shown no compunction about intervening directly in the TikTok deal — which, of course, is only happening because of his threatened ban.

  • He has repeatedly insisted the acquirer has to ensure the U.S. Treasury gets a payday from any deal — a strange and unprecedented demand — because, as he put it Tuesday, "We're the ones making it possible."

Go deeper: In the Trump era, Oracle holds tech sway

Go deeper

Nov 10, 2020 - World

What China thinks of Biden

Vice President Joe Biden welcomes Chinese President Xi Jinping in Washington, D.C., Sept. 24, 2015. Photo: Xinhua/Huang Jingwen via Getty Images.

China's leaders see President-elect Joe Biden as a more predictable, but not necessarily less formidable, U.S. leader.

Why it matters: Relations aren't likely to be chummy, but Beijing is hoping diplomacy between the two superpowers can be restored.

54 mins ago - World

Former spy Steele defends controversial Trump Russia dossier

Former U.K. intelligence officer Christopher Steele arrives at the High Court in London in July 2020. Photo: Tolga Akmen/AFP via Getty Images

The author of the "Steele Dossier," containing unverified claims about former President Trump told ABC News he stands by his controversial report, according to excerpts from an upcoming documentary published Sunday.

Why it matters: Former U.K. intelligence officer Christopher Steele's dossier was used as part of former special counsel Robert Mueller's investigation into the Trump campaign's alleged links to Russia's government.

Ina Fried, author of Login
4 hours ago - Technology

Intel CEO sees making own chips as a matter of national security

Pat Gelsinger. Photo: Axios on HBO

Intel CEO Pat Gelsinger is putting the pressure on the U.S. government to help subsidize chip manufacturing, insisting the current reliance on plants in Taiwan and Korea as "geopolitically unstable."

Why it matters: There is bipartisan support for funding the domestic semiconductor industry, but Congress has yet to sign the check. The Senate has passed the CHIPS Act that includes $52 billion in semiconductor investment, but it has yet to pass the House.

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