Trump's reversal on TikTok ban is a win for this Texas tech company

Former president Donald Trump tried to ban TikTok last time he was in office. But as President-elect this time around, Trump now says he wants to "save TikTok," a message that likely perked the ears of Austin-based Oracle.

That's because the company provides cloud infrastructure for TikTok and was staring down a substantial risk to its profits after President Joe Biden signed a bill in April demanding TikTok's parent company, ByteDance, sell the social media company or be banned in the U.S.

In an annual report for its fiscal year ending in May, Oracle pointed to the bill (known as the Protecting Americans from Foreign Adversary Controlled Applications Act) as a possible economic and regulatory restriction that could impact its operations.

"For example, in April 2024, the U.S. President signed into law a bill that will make it unlawful to provide internet hosting services to TikTok that are used to enable the distribution, maintenance, or updating of TikTok for users within the U.S. if certain steps are not taken by TikTok's owners within a set time frame," Oracle's report said.

"If we are unable to provide those services to TikTok, and if we cannot redeploy that capacity in a timely manner, our revenues and profits would be adversely impacted," Oracle added, noting that compliance with the rules could also increase the company's expenses.

Now, that risk is a little less certain. Trump stood behind a ban on TikTok but switched his position after meeting TikTok investor Jeff Yass in March, who gave Republican groups and candidates millions in the 2024 election cycle. Trump denied Yass shaped his new policy stance in a March interview with CNBC, saying he "never mentioned TikTok" during the meeting.

Oracle's CEO Safra Catz has also been associated with Trump, joining his transition team in 2016 and contributing $250,000 to his 2020 presidential campaign.

Trump's flip-flop on TikTok comes just as the company is fighting to stay in the U.S. In May, TikTok sued the U.S. government, saying the law violates First Amendment free speech protections. That same month, TikTok said it was on track with its "Project Texas" initiative, which aims to route U.S. user data to Oracle and alleviate security concerns that lawmakers have over TikTok's Chinese-owned parent company.

So while it's unclear how Trump would pursue a reversal of TikTok's expected ban, there are a few routes he could take. The Associated Press reports that Trump could push Congress to repeal the law or issue an executive order to repeal the ban, which an expert told the AP would not be lawful.

So while Oracle has a lot at stake—its work as TikTok's "trusted technology partner" is reportedly worth more than $1 billion —the company has taken a careful approach with TikTok's legal battles in the past. As the U.S. House of Representatives weighed a TikTok ban earlier this year, representatives with the tech company cited its task of guaranteeing the integrity of TikTok's data when questioned why it avoided getting too involved in the fight.