- Oracle's victory in the battle over TikTok shows how founder Larry Ellison's close ties with President Trump pays off, experts say.
- The agreement, which gives Oracle control over the popular video app in the US, also highlights Ellison's reputation as an aggressive and unpredictable business strategist.
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“Ellison is creating the model for future technology oligarchs,” longtime Silicon Valley observer Paul Saffo told Business Insider. “This craft is beyond politics, this unique mixture of corporate and personal enrichment, and political friendship.”
- Other analysts argue that the TikTok battle underscores Ellison's brilliance. “He was able to understand that political dynamics influenced business dynamics and he used it to his advantage," Silicon Valley investor Rob Siegel told Business Insider. "Pretty well done and well played.”
- Visit Business Insider's homepage for more stories .
In February, Oracle founder Larry Ellison found himself under fire from some of his own employees who were up in arms about his plan to hold a fundraising dinner for President Donald Trump.
"His alliance with this ignoble and destructive figure damages our company culture as well as our relationships with partners and customers," employees said in a petition asking for the event to be cancelled.
It wasn't cancelled and, to some, Oracle's surprising victory in the battle over TikTok has shown that Ellison's high-profile embrace of a leader who inspires so much disdain within the company (and beyond) has paid off.
"Seems like a pretty clear quid pro quo arrangement between Larry and Trump," an Oracle employee who asked not to be named told Business Insider. "We knew his dealings with Trump would implicate Oracle, the business."
Oracle declined to comment.
Paul Saffo, a longtime Silicon Valley observer and forecaster, said the TikTok deal reinforces Ellison's reputation as "a sharp-elbows entrepreneur."
"His moving into politics has been as equally sharp-elbows as his business practices," he told Business Insider. "It's paying off."
The deal itself was the product of the perhaps the most unusual and quirkiest M&A battles in tech.
ByteDance — TikTok's China-based parent company — was forced to sell the popular video app's US operations after Trump said he would shut it down unless it was sold to a US entity, claiming it violated the privacy of users and was being used for spying. Microsoft fell out of negotiations and Trump made a very public endorsement of Team Ellison's bid . The agreement gives Oracle and Walmart a 20% stake in a newly created TikTok Global and the wildly popular video app will be hosted on Oracle's cloud platform.
"This Oracle Tiktok deal is a fig leaf for the administration that really does not address the actual problem," Saffo added, referring to criticisms that it's unclear how privacy rights will be guaranteed in the deal. "The whole bunch of public supporters of Trump are going to get rich off of it. So I would say Larry's politics are good business."
Ellison has long been known as one of the most brilliant and aggressive strategists in Silicon Valley. He launched Oracle in 1977 as a provider of technology used by big corporations and government agencies to store massive amounts of data.
Ellison subsequently expanded beyond database systems, to other enterprise applications software. In the early 2000s, he moved to consolidate that entire market and did not hesitate to use brash and highly-combative tactics.
In 2003, Oracle stunned the tech world by unleashing a hostile takeover bid for rival PeopleSoft, the popular human resources software maker. That led to a bitter battle featuring some intense, though sometimes churlish, exchanges. PeopleSoft's then-CEO Craig Conway blasted Oracle as a "sociopathic company." Ellison fired back by joking about shooting Conway or his dog.
Oracle also found itself facing off with the Justice Department, which sued to block the planned merger which it argued would hurt competition. Ellison himself testified to defend the deal, telling a federal judge in San Francisco: "There's a lot of consolidation going on. ... We wanted to be a survivor and a consolidator. The only way was through an acquisitions strategy."
Oracle won that fight, gobbling up PeopleSoft in 2004. But by then, a new challenge was emerging: the cloud.
The new trend let businesses set up networks on web-based platforms, making it possible to scale down or even abandon in-house data centers. That was bad news for traditional tech giants like Oracle which became a powerhouse by selling high-end enterprise software installed in private data centers.
It's a fast-growing trend that Amazon, Microsoft, and Google dominate, which many analysts say Oracle missed.
But Ellison — who turned 76 this year and is now one of the longest serving founder executives in Silicon Valley — has vowed to fight back. And over the past three years, his Trump connection has helped. (Oracle CEO Safra Catz is also a known Trump supporter and was a member of the Trump transition team.)
Ellison has routinely blasted Amazon publicly, arguing that Oracle has a more sophisticated and secure platform. The rivalry escalated in the battle over the Defense Department's $10 billion JEDI, or Joint Enterprise Defense Infrastructure, contract. Amazon was the favorite to win the contract. But Oracle waged a legal challenge accusing the Pentagon of holding a flawed bid process that favored Amazon. Then Trump joined the fray. Known for a highly public dispute with Amazon CEO Jeff Bezos , Trump began echoing some of Oracle's criticisms of Amazon and the bid process.
Then, in a surprising decision, the Pentagon awarded the contract to Microsoft . It was also seen as a victory of sorts for Oracle and Ellison. He had managed to derail his chief rival in the cloud. Analysts also note that Oracle could benefit from the deal itself after forging a partnership with Microsoft .
It was an odd alliance given the two giants' bitter history as rivals. In fact, that rivalry wasn't over as shown by the battle over TikTok. Microsoft was widely expected to win in the negotiations since it actually has a consumer business and is a known consumer brand. (Observers have noted that many TikTok users probably don't know what Oracle sells.)
"[Microsoft] felt like a much more natural fit," Mark Coopersmith, a Bay Area investor and a senior fellow at the UC Berkeley Haas School of Business, told Business Insider. "I think there was very much an element of political expediency and Larry Ellison's access and friendliness with the White House that helped."
In fact, Saffo cautioned that with the TikTok deal, Ellison is starting to epitomize the new type of Silicon Valley leader. "Ellison is creating the model for future technology oligarchs," he said. "This craft is beyond politics, this unique mixture of corporate and personal enrichment, and political friendship."
Rob Siegel, a Silicon Valley investor and management instructor at the Stanford Graduate School of Business, attributed Oracle's success in the TikTok negotiations to Ellison's skill as a businessman with sound political instincts.
"Brilliant," he told Business Insider. "He was able to understand that political dynamics influenced business dynamics and he used it to his advantage. Pretty well done and well played."
Notably, though, he downplayed the significance of Ellison's Trump connection, versus his political canny overall.
Siegel also argued that the battle over TikTok highlighted the changing relationship between Silicon Valley and Washington. "Washington is gonna have a much bigger stake in tech," he said. "Tech is so much more important than it used to be. Business leaders are going to have to figure out how to work with governments."
Eric Schiffer, CEO of the Patriarch Organization, a private equity firm, praised Ellison as "one of the single greatest strategic minds in technology."
"He wins wars without fighting in a way that keeps his adversaries always guessing," he told Business Insider. "Larry's evolution as a leader is the modern day manifestation of the Sun Tzu guide to execution in tech."
In fact, Ellison himself offered a glimpse of his leadership philosophy during the 2003 Delaware trial related to Oracle's hostile bid for PeopleSoft when he praised a legendary Asian ruler known for his ruthless, take-no-prisoners approach to warfare: Genghis Khan .
Conway, the former PeopleSoft CEO, who had tried to portray Ellison as a hyper-aggressive executive, claimed in court that Ellison kept a book about Genghis Khan on his desk.
"I think it's called 'The Art of War, Genghis Khan,' and he would quote from the book," Conway said.
"The Art of War" was, in fact, written by Sun Tzu. Ellison later testified that he had no such book on his desk.
But an Oracle attorney looking to highlight Conway's error asked Ellison: "Did Genghis Khan ever write a book called 'The Art of War,' do you know?"
Ellison said: "He was an illiterate Mongol but a hell of a general."
Got a tip about Oracle, TikTok or another tech company? Contact this reporter via email at bpimentel@businessinsider.com , message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop .
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