The dictionary definition of the word “grift” is as follows: “to acquire money or property illicitly”. It may be a strong word, but also more or less encapsulates the regulatory ethos that’s governing cross-border technology businesses these days.

The TikTok-Oracle deal flaunts this grifting ethos, but it’s just the latest example of a series of haphazard regulatory actions mired in geopolitical brinkmanship -- a trend that may implicate deals with much larger impact, like the pending Nvidia acquisition of Arm.


There are still many missing details to the TikTok-Oracle deal, and Trump may not approve the deal. But in the grand scheme of things, many of these details are no longer important, because the spirit of the entire TikTok “soap opera” is cemented: a regulatory grift by the Trump administration that enriches its political donor (Larry Ellison), strengthens its campaign message (anti-China, job creation), while doing next to nothing to protect Americans from either intrusive data collection or foreign influence.

Let’s look at each of these malfeasances.

What Oracle gets. TikTok’s immediate business value accrues to Oracle Cloud to the tune of possibly $1 billion in annual revenue in the coming years, as it desperately tries to catch up to AWS and Azure. The Oracle brand may also get a boost from this young, cool consumer product, even though Oracle has no experience running such a product. Since I’ve written in detail about TikTok’s business value in “What is TikTok Worth to Whom and Why?”, I won’t repeat myself here. One element I did not discuss so explicitly is how valuable TikTok’s user data is to the Oracle data broker business.

In a nutshell, a data broker sells data to third parties mostly for marketing or advertisement purposes. Oracle’s data broker businesses are euphemistically called Oracle CX Marketing and Oracle Data Cloud. Having the treasure trove of data that TikTok has already collected is perhaps an even more immediate business boost to Oracle than getting the product’s workload onto its cloud. Ironically (or perhaps appropriately), the person who called out the privacy violations of data brokers like Oracle, Equifax, and others is Michael Berkerman, who is currently TikTok US’s Head of Public Policy. He did so last year as the then President and CEO of the Internet Association in an OpEd published on Fox News -- a “media” outlet that the President of the United States most certainly pays attention to. I wonder how long Berkerman will be sticking around, if at all, after the TikTok-Oracle deal closes.

Lastly, Oracle will likely get a minority stake in TikTok with ByteDance still being the majority shareholder. This piece of equity in one of the most valuable private tech companies in the world -- trading at a $140 billion valuation in the secondary market earlier this year -- is something that Oracle would have no business getting in a normal investing situation. Not a bad deal for hosting a single fundraiser.

What the Trump campaign gets. Being more “anti-China” than Biden and going after the Vice President’s son’s business dealings in China has been a messaging tentpole of the Trump re-election campaign. It can now claim credit for acting tough and forcing a marquee Chinese tech company to “surrender” its crown jewel product to America, while accomplishing none of those things, because TikTok’s core technology is staying with ByteDance in China.

The Oracle bid also apparently includes a “20,000 new jobs” commitment -- a typical public relations promise with no legally binding effect. Being “anti”-China while “creating” jobs is a strong one-two punch as we approach the final stretch of the 2020 election season, so much so that Secretary Mnuchin couldn't wait to sell the 20,000 jobs message on CNBC the day after Oracle’s winning bid was made public, even though the deal hasn’t been approved or finalized yet.

TikTok US’s current payroll is about 1,400 people. That would be an almost 20x increase in headcount. Theoretically possible? Sure. Practical and sensible? Hardly.

What the American people get. Nothing, except that they still get to watch cool dance videos and grandmas do this on their phones. We have no new information or answer to any of the three legitimate concerns surrounding TikTok:

  • Does it send data to China?
  • Is its user data collection practices proper?
  • Is it being used as a tool for foreign influence?

To be clear, there are regulatory tools based on technology at our disposal to answer these questions, with or without Oracle. I’ve laid them out in detail in “A Framework to (Dis)trust and Verify TikTok”. Unfortunately, it’s clear as day that the Trump administration is only interested in the political messaging benefits of TikTok-Oracle, not doing the actual work that is required to protect the interests of the American people.

There is another winner that we should all take note of: Chinese regulators.

Chinese regulators typically use their power to force technology and IP transfers from foreign entities to domestic companies via joint-ventures or outright acquisitions -- another form of regulatory grift. This TikTok-Oracle deal is the first time to my knowledge, where Chinese regulators use their power to protect a home-grown technology from being transferred out to a foreign entity.

This win has just as much to do with exerting their regulatory power as the sucker on the other side of the negotiation table. This dynamic isn’t new, if we look at the failed NXP-Qualcomm acquisition in 2018.


Qualcomm’s attempt to buy the Dutch semiconductor maker, NXP, for $44 billion was abandoned, because it could not get approval from Chinese regulators. This occurred during the previous height of tension when the U.S. and China were tossing retaliatory trade tariffs at each other like a couple of teenage boys in a backyard snowball fight.

The Chinese regulators did not disapprove of the deal and asked for changes to gain approval, which would’ve been a good faith move. They just ignored it and let the deadline pass. This is after Secretary Mnuchin and his Commerce Department counterpart, Wilbur Ross, lobbied the Chinese Vice Minister, Liu He, and Ambassador to the US, Cui Tiankai, to approve the deal. The backdrop of this lobbying was Trump easing the penalties on the Chinese telecom equipment maker, ZTE, for violating U.S. sanction rules with regard to Iran and North Korea -- hoping for some reciprocity and dealmaking.

This foolish hope did not pan out. Instead, Qualcomm, America’s national champion in the race to 5G, had to fork up a $2 billion cancellation fee to NXP and increase its stock buyback program from $10 to $30 billion to appease its shareholders. What’s more, this turn of events showed Chinese regulators that given the interconnected nature of the global economy, particularly technology businesses, they have far-reaching authority and leverage to shape deals, events, and technology acquisition vis-a-vis a tough-talking, weak-acting Trump administration. It is a key reversal in fortune, when a large swath of China’s technology sector, particularly Huawei, has been hammered by U.S. sanctions.

Qualcomm-NXP was a defensive play -- not approving a deal. TikTok-Oracle is a proactive play -- not losing control of domestic technology. There’s now an opportunity for even more aggressive “regulatory grift”: Arm-Nvidia.


It’s hard to comprehend the long-term impact that Nvidia’s $40 billion acquisition of Arm will have on the future of technology. One thing is certain though: it’s way more important than TikTok and Oracle, separately and combined.

We shouldn’t assume the Arm-Nvidia deal will be closed as expected given all the corporate governance issues with Arm’s China operation. Arm China’s CEO, Allen Wu, has been fired by the board for various acts of conflicts of interest and double dealing, yet refuses to leave. Arm’s CEO, Simon Segars, is trying to assure the public that the mess will be cleaned up in order to not endanger the sale, but he’s not in a position of leverage, now that the deal is public and the expectations are high. (Nvidia’s market cap increased by $17.5 billion the day after the deal was announced.)

Furthermore, the Arm China division is a joint-venture where 51% of the entity is owned by a consortium of these three funds:

The other 49% is owned by Softbank via Arm. The joint venture structure is par for the course for any foreign technology company doing business in China. But such a tight ownership by state-owned funds means Chinese regulators (and Singaporean regulators for that matter) have strong jurisdictional power over the deal from the get-go. NXP-Qualcomm’s legal hook was a tenuous nexus. TikTok-Oracle’s hook was established by an eleventh hour change to the government’s technology “entity list”. Arm-Nvidia doesn’t need any extra work for regulators to aggressively insert themselves into the picture.

What will the Chinese regulators do is hard to tell at this moment. However, given the fact that Arm’s chip design IP has a 95% global market share in mobile devices and is making inroads into cloud data centers as well, it’s likely that China will either veto the deal (like NXP-Qualcomm) or try to keep any semiconductor IP that Arm China has even a tangential connection to. Some Chinese tech media are already speculating about a veto. Using this opportunity to acquire some key technology also makes sense, because by not doing so, China runs the monumental risk of having the entire Arm ecosystem be subject to U.S. sanctions after it becomes a property of Nvidia. An “Arm sanction” would cripple China’s entire mobile technology sector, where domestic chip design options barely exist and the open source option, RISC-V, still has a long way to go. (For more on RISC-V, see “RISC-V, China, Nightingales.)

Nevermind if none of the Arm IP was developed in China; grab it while you can, for the national interest of self-sufficiency. Regulatory grift at its patriotic best.

Regulators’ Job

Regulators have an important, if not noble, societal responsibility: to enforce laws that protect the vulnerable and unprotected. At least in the US-China context, no one is doing a good job.

American regulators have failed the hourly workers who were duped into buying houses they could not afford with subprime mortgages. American regulators are failing ordinary citizens, whose personal information is being sold by data brokers like Oracle and Equifax. Chinese regulators have failed consumers who are ensnared by the peer-to-peer lending scandals. Chinese regulators are failing the food delivery workers whose livelihood (and literal lives) are determined by cold-blooded algorithms. The list of failures is long.

Instead, regulators are weaponizing their power to take from businesses and technologies for political messaging and brinkmanship, while pretending to “protect people”, “defend national interest”, and “create jobs”. This abuse is happening at all levels -- nationally, internationally, even locally where I live in California (see the gig economy fight with AB-5 and Prop 22).

Regulators don’t build things. That’s ok, they are not supposed to. But they are also not supposed to take things others have built just because they can.

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TikTok与Oracle这笔交易仍有许多细节没有敲定和公布,而且也有可能得不到特朗普的批准。但从宏观角度来看,许多这些细节已经不重要了,因为整个TikTok这本“肥皂剧”的主题精神已经明确了:特朗普政府的监管欺诈塞满了自己政治支持者的腰包(Larry Ellison),强化了其连任竞选的主题曲(反华、创造就业),并几乎没有做任何实事来保护美国人不受个人数据收集或外国势力的侵犯。


Oracle得到了什么。有了TikTok后最直接的受益产品就是Oracle Cloud,未来几年的营业额可能每年会多至少10亿美元,并有利于它拼命追赶AWS和Azure。Oracle的品牌也可能从这个年轻又酷的产品中得到提升,尽管Oracle没有运营这种产品的任何经验。因为我在《TikTok为什么,又对谁,有什么价值?》已经详细分析了TikTok的各层商业价值,我就不在这里重复了。但是还有一个因素我没有明确讨论,那就是TikTok的用户数据对Oracle的数据代理业务有多重要。

简单来说,数据代理这门生意就是把数据卖给第三方,为了营销或打广告。Oracle的数据代理业务委婉隐晦地被称为Oracle CX MarketingOracle Data Cloud。拥有TikTok已经收集到的数据宝库对于Oracle来说,可能比将产品的负载放到自己的云上更可以直接促进业务发展。有点讽刺但也许也很恰当的就是曾经公开指责过Oracle,Equifax等数据代理商侵犯隐私的人是Michael Berkerman,既TikTok美国团队的公共政策主管。他去年以互联网协会(the Internet Association)CEO的身份在Fox News(美国总统绝对看的一家“媒体”)上写了一篇指责Oracle和其他数据代理商的文章。我倒想知道,在TikTok与Oracle的交易完成后,Berkerman还能坚持多久。






  • 它向中国发送数据吗?
  • 它的用户数据收集做法合理吗?
  • 它有没有被当作一种外界势力影响美国的工具?







当时中国监管机构并没有明确反对这笔交易,并提出怎样获取批准的要求和修改,要是真这么做就好了。他们只是置之不理,让最后期限过去,让交易自动泡汤。这是在Mnuchin部长和商务部部长Wilbur Ross努力游说中国副部长刘鹤和驻美大使崔天凯批准这项交易之后的结果。这轮游说的大背景是,特朗普放宽了对中兴通讯(ZTE)因为违反美国对伊朗和朝鲜的制裁规定的处罚,从而希望能从中方得到一些互惠。





考虑到Arm中国业务的治理问题,我们不应假设Arm-Nvidia的交易将顺水推舟的如期落实。Arm中国分部的CEO,Allen Wu,因各种利益冲突和双重交易行为被董事会解雇,但却拒绝离职。Arm的CEO,Simon Segars,试图向公众保证这场乱局会被清理干净,为了不危及交易的顺利进行。可惜他现在没有什么杠杆,因为这笔交易已经公布,而且市场的期望值极高。(在交易宣布后的第二天,Nvidia的市值就增加了175亿美元。)


  • 中国投资有限责任公司(国家的主权财富基金)
  • 丝路基金(专注于投资“一带一路”相关项目的国有基金)
  • Temasek Holding(新加坡主权财富基金)







相反,监管者正在把他们的权力武装化,从企业和技术中欺诈夺取他们所需的东西来支持政治宣传和其他目的,同时假装“保护人民”、“捍卫国家利益”和“创造就业”。这种滥用行为在各个层面都在发生——全国性的,国际性的,甚至还有当地性的,包括我居住的加州(请看AB5和Prop 22在共享打车行业的监管讨论)。