TikTok reaches deal that would give Oracle oversight of U.S. operations


And Tick Tock recently made headlines Everywhere when Resin Donald Trump signed an executive order. That would essentially ban the Chinese owned APP in the US for national security reasons. Unless it sells its operations here to an American company. And of course, if that were to happen. We would have nowhere to go to see a million potatoes singing. To Adele. And that would be a national tragedy. This week deal actually emerged between TIKTOK and American company Oracle but some people like Zachary say trump's tiktok policy effectively changes. Nothing. The argument goes like this. It will do little to protect Americans data from the Chinese government because there are still plenty of other ways China could get that data that this move is just a new kind of security theater basically. The hard work of data security according to this actually lies elsewhere. So, Zachary TIKTOK has been banned in Indiana a few other countries, but it's still pretty popular for now it's the most popular video sharing app i. can see why it seems like fun and there are mental creative. They're short I mean the whole nature of the medium has their time limited. What happened with Tiktok this week what happened this week? Should be clear but isn't. Basically, in August, the trump administration ordered via executive order whose legality remains highly questionable that the Chinese owner of Tiktok, a company called Bite Dance. Divest itself of Owning Tiktok within ninety days or face the prospect that tiktok would be shut down in the United States. I broke the deal I said you can't do business in the United States, which is at least potentially within the power of the US federal government based on national security concerns based on national security and the logistics are complicated that you probably could order apple and other people and servers that are hosting tiktok. that. They couldn't do it and it would defacto make it impossible for Tiktok to function. So that is what began a process where the owner of Tiktok, again, a Chinese company sought an alternative way to their cell, the US portion of Tiktok or what ended up happening major deals Rocking Wall Street this morning pushing futures higher. We find an American technology partner Oracle beat Microsoft and become the technology partner for TIC TACS US operations although will not. receive its coveted algorithm so that all took talks data would be kept in the United States on servers owned by an American company and not by Chinese company because the whole point of this was that all these people using Tiktok, these tens of millions, hundreds of millions that data was potentially vulnerable to being used and therefore misused by the Chinese government. How so So the fear was because technology companies in China by Chinese law are required if. By the Chinese government to turn over data relevant data that the Chinese government could tell the parent company of Tiktok, hand us all of your user data which user data of again tens of millions of Americans. and. Then China would have that data. So that was the concern right and and that's a legitimate fact the Chinese government could order that. The problem is, of course, one via our court system, an American court can order or prosecutor can subpoena data. From our companies. So it's not like what you and I do on Google or what we do on any technology provider is somehow. Unavailable. To government if government decides that it's in its interest to get it not to mention the the various many non-government actors, the vacuum, the stuff up and use it for their own purposes that is even more important I think probably more relevant to the China issue which is. Does it matter whether the data is in this case, potentially house by Oracle massive US hardware and software company versus being housed by servers in China. In terms of the ability of the Chinese government to obtain that data, it wanted to obtain it because not just third parties that hoover up data and use it in the whole buying selling and the data market, but just spying tools. Whether it's the NSA in the National Security Agency in the United States or various Israeli cybersecurity and or cyber spying companies or the Chinese government. Most of this data isn't that secure. Not. Like. Triple encrypted quantum encrypted defense department level communications. So likely true that if the Chinese government really wanted my teens Tiktok data, it doesn't really matter whether that data's House on servers in China owned by Chinese company or whether it was housed on American servers on buying American company. So I guess, then how do we get to this point? How did you know given what you just said why has this become such a big issue? How did it start? Yeah it's a good question I I'm not sure. There's a precise answer. It's part of a whole continuum of the trump administration in particular identifying China as a proximate threat to the United States and a whole series of ways competitively in terms of trade practices hence the hundreds of billions of dollars of Chinese imported goods that have been subject to American tariffs. It's part of a multi year campaign against this massive Chinese telecom equipment company called Wa wa, which has been a leader in next generation five G. Telecom equipment in a way that again, some of the same concerns have existed which is. That the Chinese government would would use the production of that equipment as a way to spy on who met from purchase adequate. And Look a few years ago. There was a a forced sale of gay dating APP Grindr, which was also owned by a Chinese company, and so there was an earlier precedent of forcing a Chinese company to sell an American APP Social App. Because, of data concerns and finally, there's the fact that for years long predating the trump administration. China has not allowed American social media companies like facebook. To function in China. So there's the tit for tat. You know you don't let our social media functioning companies function there. Why should we let yours function here? There's Several year campaign against China which the trump administration's pursued but I think has a good deal of democratic support I. Mean if it's close to a bipartisan sentiment that China, China's a threat as anything we have right now. Why Tiktok? Suddenly became a thing I may partly have to do with the fact that it suddenly became a very big deal in the United States. I mean, this was not a company that had any footprint several years ago and suddenly as. The APP does your so it may have had to do with something that got really big and is very noticeable. Salsa not that economically important. So a lot of people would be royally pissed off Tiktok were banned. It's not like tiktok is. An integral component. To the US economy either during covid or without covid. So it's an easier target. We'll be right back. Everyone wants to become a better leader this groundbreaking new book how to lead shows you how David M Rubenstein is one of the visionary founders of the Carlisle Group and host of the David Rubenstein Show where he speaks to leaders from every walk of life about who they are, how they define success and what it means to lead. 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Is it because there's concern about people who worked at the Defense Department or the military whoever having to talk in in use in their households or people in the Defense Department are not allowed to use tiktok certainly not on their phones. For before this although they may have teenagers who That's vulnerability as well. So it wasn't primarily about like US government employees who might have sensitive data that tiktok would be the back door way that the Chinese government would spy on them but it was generalized sense of any foreign government that is using private American citizen data potentially for nefarious purposes represents a national security threat. Now, it clearly has not represented the kind of national security threat in the estimation of the White House right now when it's Russian. Manipulation of social media accounts the same principle should or would apply right. If you'RE GONNA ban, Tiktok you'd probably want to take action against the a variety of Russian media enterprises that are attempting to manipulate and hoover up American user data. Some of that data's you mentioned earlier in terms of third party is available to anybody for a price just because there's a marketplace for data. Which I think either most of us aren't aware of or frankly most probably don't care if politicos data on this podcast gets sold to fourteen vendors so that it can sell you and me products based on our other computer activity most people. Either like that, or don't care about that. But the national security concern is simply because it's a foreign government that could potentially. Use, our search history or browsing history nefarious. And again a, that might be true but be it's likely that all this kind of data is obtainable irrespective of whether or not a company called TIKTOK. Happens to have access to a lot of it. It's really interesting. So into this whole story comes oracle, you know huge hardware software firm but how did they get involved here? Yes. Oracle is is a multibillion dollar firm that has had the same public profile as Microsoft or Amazon or facebook or apple because most of its business is to other large companies, you know you and I don't tend to go out and buy Oracle piece of hardware because we don't need a hundred and fifty thousand dollars server or. Network system for our employees. They're largely corporate provider throw a huge provider to the Defense Department in terms of cheer equipment and material, and they're huge software company. They're one of the early Silicon Valley success stories and the billionaire founder Larry Ellison has been probably more conservative than not I don't know that I buy into the whole. This is a reward versus. A snub to the other potential main acquirer or partner for Tiktok, which was rumored to be Microsoft but this is an unusual. This doesn't usually fit oracle's business model. Well, that's that's interesting. So what is their interest in getting involved here perceived to be I'm not one hundred percent clear about that I mean look at could allow them to. Have a little bit more of a consumer facing brand. Again, I mean Oracle's. Primarily a software company primarily a database company. Maybe this could help them increase their databases. There's no way that this is a natural fit for goal. But at the same time north this a huge cost for Oracle, maybe it'll produce some American jobs. I mean. They're looking for growth just like everybody's looking for growth, and once you get to be the size of Oracle. Growth gets harder some of they're also looking for a DIFFERENT INDUSTRY TO BE President Chore? So. What exactly did they given? What did they get here that as of this conversation is not one hundred percent clear off so it was presented as or go by tiktok. That is not the case or at least it's not the case now and as possible. The deal will be scuttled or change given that all of this has to be approved by the government has to be approved by committee. Called Syfy S, which is the committee in charge of looking at global deals in terms of US national security, but it would seem that right now. The parent company of Tiktok saw own TIKTOK and get some of the economic benefits of TIKTOK. This Chinese company called by dance and that Oracle in turn will get a massive licensing deal to house Tiktok data and information on its own. Servers and using its own software. So the concern that the Chinese government would have access to that data would be allayed meeting under this agreement arrangement because the data would be managed by and it's housing would be arranged by a US company. The Chinese government could order by dance to turn over but by dance itself wouldn't actually have access to that data. It's interesting I mean based on what you said before it's they're they're they're moving this data from place a, it's not going to be in a different place and I guess the Chinese government will no longer have a key to the door. But as you said before there's many different ways that either the Chinese government or a lot of other. State or private actors can get hold on more or less any data they want to these days right? which kind of raises the question for point of all, this is ENA. It's certainly true. It would make it a little more challenging to get that data under that kind of arrangement. It seems like this a big fight over a big company. That's not actually really about. The literal subject of the conflict here. Yeah. It is totally fair to say that whatever the imbroglio about tiktok has very little to do with tiktok. And everything to do with US policy toward China. And the trump administration looking for some High profile optic to be able to say we're we're being tough on China and protecting American citizens. Again, the oddity of Tiktok is given that so many of its users or young adults. Who Don't vote although who would be? Extremely, Acetate it. If they woke up tomorrow and there's no TIKTOK meeting, it's probably not. The most popular move if what you're trying to do is gain support during a presidential election. So it's not entirely clear what constituency the served there wasn't like a huge congressional clamor for Oh my God. We're all big imperilled by these fifteen second videos. So where do you think things go from here in terms of into in terms of the real story behind all this in terms of the U., S., China relationship and the increasing in. them of that. So I think to some degree regardless of who wins the presidential election. there. Is a train that's left the proverbial station of increasing. Distrust and animosity between the United States and China. But within the context of an incredible amount of economic interdependence that you cannot just snap your fingers and several or at least not without massive massive harm to each part of that equation both the United States and China, and that's that's pretty unprecedented. Right? Right. That's like the Cold War analogy doesn't work because there was no economic relationship between the United States and the Soviet Union nineteen. Fifty S

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