Oracle Corporation (NYSE:ORCL) shares climbed more than 5% in premarket trading on Friday after reports pointed to progress on a potential restructuring of TikTok’s U.S. business and renewed investor enthusiasm around artificial intelligence following fundraising discussions at OpenAI.
According to media reports, TikTok owner ByteDance has agreed to divest more than 80% of the app’s U.S. operations to a consortium that includes Oracle, private equity firm Silver Lake and Abu Dhabi-based investor MGX. The proposed transaction is designed to address U.S. national security concerns and avert the risk of a ban on the widely used short-form video platform.
Under the proposed structure, Oracle and its partners would take majority ownership of a newly created TikTok U.S. entity, with the deal expected to close in late January.
“This would secure TikTok as a key customer for OCI, and could drive meaningful upside for non-AI part of business via durable, higher margin workloads,” Mizuho analyst Siti Panigrahi said in a research note.
The rally in Oracle shares was further supported by a report from The Information stating that OpenAI — the artificial intelligence company backed by Microsoft (NASDAQ:MSFT) — is in preliminary talks to raise as much as $100 billion at a valuation of roughly $750 billion. The news highlighted sustained investor appetite for large-scale AI investments.
Earlier this month, Oracle’s stock had come under pressure amid concerns over rising infrastructure costs linked to its multibillion-dollar cloud partnership with OpenAI, making Friday’s rebound a notable reversal in sentiment.