Recent Items

Coffee Break: Oracle Debt and TikTok Transition Troubles Vex the Ellison Media Empire

Posted on by

Oracle and TikTok are overshadowing the problems at Bari Weiss’ CBS News this week.

Larry and David Ellison are attempting to create a massive multi-channel media empire with reach across multiple demographics and the scale and synergy to build something more than the sum of its parts.

Larry Ellison’s database behemoth, Oracle, provides the financial foundation beneath the aspiring media empire.

TikTok is the shiny new acquisition that gives the Ellisons’ hasbara-enforcing empire its reach into the Zoomer demographic and its algorithmic influence over what that demo sees… and perhaps thinks.

Combined with the Paramount TV network and Hollywood studio empire that Père Larry bought for fils David, Oracle’s 15% share in the American version of TikTok was supposed to make the Ellisons kingmakers and resistance breakers.

But, as I’ve posted before, empire building ain’t easy. This week, financial problems at the foundational level and technical problems at TikTok are vexing the imperial Ellisons.

Ed Zitron Goes for the Kill

In the latest premium-subscriber-only edition of his newsletter Where’s Your Ed At?, Ed Zitron argues that “the AI bubble means that every single participant, without exception, is operating on borrowed time.”

Most of the issue is spent explaining how doomed OpenAI is, the way GPU accountancy guarantees the hyperscalers (Microsoft, Amazon, Meta, Google) will be facing massive depreciation write-downs (and possibly even impairments) for the foreseeable future, and outlining various scenarios explaining what may happen if and when OpenAI fails.

But he saves a big passage at the very end for Oracle.

Some key quotes:

I cannot express how stupid Oracle is.

It signed a $300 billion deal with OpenAI back in September of last year that requires 4.5GW of capacity that Oracle does not have, and has taken on $248 billion in lease obligations on top of it. Oracle does not have the cash to support these operations. It had negative $13 billion in cash flow last quarter, raised $18 billion in bonds, that $38 billion debt package for Stargate Shackelford and Wisconsin has yet to close, and Blue Owl — the loosest legs in data center funding — pulled out of Stargate Michigan in December, with nobody else stepping up to the plate as of writing this sentence.

Here’s the thing: for any of this to work, OpenAI has to become profitable within the space of two years, and do so at a scale where it is able to afford $30 billion or more a quarter in compute costs. To give you some context, Microsoft Azure makes around $75 billion annually, and AWS $115 billion. OpenAI, in its best-case scenario, made around $13 billion this year, and Oracle will be charging it at least $25 billion in the next year if any of this compute is actually made available.
…

Every quarter, Oracle’s debt expands. It paid $1.057 billion in interest in its last quarter, up from $933 million in the one before, and $892 million the quarter before that.

In the middle of 2024 (its Q1 FY2025) — just before NVIDIA’s Blackwell GPUs started shipping — Oracle had $23 billion in PP&E. As of its latest quarter, it had $67.875 billion, likely almost entirely made up of NVIDIA’s GB200 racks, which The Information reported had negative 100% gross margins, specifically on Oracle Cloud.

This is not a situation where Oracle “works it out.” GPUs are destroying its gross margins just as its software business begins to contract, and its largest customer for this unprofitable business segment is OpenAI, the company that does not have any money and in fact loses it all.

The longer the AI bubble inflates, the more it seems like Oracle is in threat of actually defaulting on its loans and collapsing.

This December chart from Manu Invests shows why Oracle is the most vulnerable of the (would-be) hyperscalers:

This goes a long way toward explaining the 25% drop in Oracle’s share price over the past six months:

The financial research and technology platform Trefis tried to explain Oracle’s share-price decline to Forbes readers:

Oracle (ORCL)’s stock plummeted by 37% in the last three months, even with a modest increase in revenue and better margins. The reasons for the decline include cautious Q2 earnings, diminished enthusiasm in AI, reductions in analyst price targets, and insider selling—all contributing to a significant drop in investor confidence. What’s truly behind this rollercoaster?
…

  • Q2 FY26 Earnings: EPS exceeded expectations, but increased capital expenditure and negative free cash flow caused concerns among investors.
  • AI Infrastructure Bet: Substantial investments in AI data centers led to significant debt increases and pressure on the balance sheet.
  • Analyst Target Cuts: Several firms decreased their price targets due to concerns regarding AI strategy implementation and valuation.
  • AI Market Sentiment: Worries about an ‘AI bubble’ negatively impacted ORCL, resulting in a 30.5% drop in Q4.
  • Insider Stock Sales: Notable executives sold shares in late October 2025, potentially indicating a lack of confidence.

Bears should be warned that financial seer and CNBC talking head Jim Cramer calls Oracle a “linchpin stock” for the AI boom:

Jim Cramer: I wanted to be fatuous just in keeping with the news that I read which makes me feel like, are you kidding me? Come on, are you kidding me? Are we really supposed, what are we supposed to sell Oracle off of this?

But even Cramer jawboning the stock wasn’t enough to turn the tide.

That took some news about Oracle’s 15% share of American TikTok becoming official.

Controlling TikTok Bumps Oracle’s Share Price

A new internal memo from TikTok CEO Shou Zi Chew however, has Oracle shares rising in price today.

Key highlights:

Today, TikTok USDS Joint Venture LLC has been established in compliance with the Executive Order signed by President Trump on September 25, 2025, enabling our US users to continue to discover, create, and thrive as part of TikTok’s vibrant global community and experience.
…
TikTok’s growth in the US nicely sets up the Joint Venture for strong future success. The majority American owned Joint Venture will operate under defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for US users.

It will be led by Adam Presser who, today, has been chosen by the Joint Venture’s Board of Directors for his impressive track record with the company leading large-scale teams in the areas of Trust & Safety and Operations.

The New York Times has more details, including who owns how much of this new beast:

Investors including the software giant Oracle; MGX, an Emirati investment firm; and Silver Lake, another investment firm, will own more than 80 percent of the new venture.
…
Adam Presser, TikTok’s former head of operations, will be the chief executive for the U.S. TikTok.

The deal is intended to loosen TikTok’s ties to China and address national security concerns that Beijing could use the app to surveil or manipulate its more than 200 million users in the United States.
…
Under the new arrangement, Oracle, MGX and Silver Lake will each own 15 percent of TikTok’s U.S. operations. ByteDance will own just under 20 percent.
…
The majority of the seven-member board for the new U.S. TikTok will be American, according to a December memo to TikTok employees. Mr. Chew has a seat on the board.

The new venture will moderate content in TikTok’s feed, deciding which posts to leave up and which to take down.

Note that Oracle’s main partners in the new venture are an Emirati investment firm and Egon Durban’s Silver Lake.

The UAE Is All-In on Israel’s Hasbara Agenda

Forgive me for a brief detour, but it’s important to point out the political and geo-strategic context in which the UAE is a key shareholder in American TikTok.

The UAE is currently isolated in the Middle East after falling out with Saudi Arabia. The latter is building a Sunni block that includes “Qatar, Oman, Egypt, Turkey and Pakistan” while the UAE is openly aligned with Israel and India, per the SCMP.

The UAE has been pushing reactionary narratives in the west since the end of the Arab Spring, but now it stands exposed as an open ally of Israel.

From The Washington Post last week:

…the rupture between the two oil-rich monarchies is already rippling beyond Yemen as Saudi Arabia, alarmed by what it sees as aggressive military and foreign policy moves by its much smaller neighbor, works to counter the deep web of influence Abu Dhabi has spent years building in the Horn of Africa and around the Red Sea.
…
Riyadh’s sudden, more assertive stance has countries in the region trying to navigate the rift. For years, Saudi Arabia and the UAE worked largely in tandem, backstopping other autocrats amid the Arab Spring uprisings and joining forces to counter the Iranian-backed Houthis in Yemen.

In recent days, however, Saudi Arabia has shored up other alliances to curtail its rival and is in talks with both Egypt and Somalia to expand security cooperation between the three countries, according to a senior Somali security official. Somalia’s federal government also said it was canceling its defense agreements with the UAE, which maintains commercial ports and military bases in at least three areas — Somaliland, Puntland and Jubaland — where the government in Mogadishu has little presence or influence.
…
Andreas Krieg, an associate professor at King’s College London’s School of Security Studies, has described the UAE’s regional network as an “axis of secessionists.”
“Abu Dhabi is comfortable operating below the threshold of formal statecraft, building influence through a web of commercial vehicles, logistics access, security assistance, intermediaries and local armed partners,” he said.

Notably the WaPo piece avoids any mention of the Israeli-UAE alliance.

Dr. Krieg spells it out more clearly on his X account:

I should also mention that Silver Lake is a primary owner of Ari Emanuel’s WME Group, the company that owns a majority of TKO, parent company of the UFC and WWE.

Emanuel played a key role in the Ellisons’ securing Trump’s approval to buy Paramount, and also reportedly helped the Ellisons secure financial backing from the UAE, Qatar, and Saudi Arabian sovereign wealth funds for Paramount’s (so far) unsuccessful bid for WBD.

I doubt that same constellation of investors could be assembled today, after the falling out between the Saudis and the UAE.

But let’s get back to TikTok.

Adam Presser’s Fight Against ‘Anti-Semitism” Drawing Attention

New CEO Adam Presser has been outspoken about his plans for the platform.

Here are some key points from Presser’s talk at last year’s World Jewish Congress (via Chris Menahan on X.com)

  • They made “Zionist” a “proxy for a protected attribute” to designate it “hate speech” if used in a negative light (the WJC lobbied for this change).
  • TikTok *tripled* the number of accounts they were banning for “hateful activity” “over the course of 2024” (i.e., post-Oct 7th).
  • TikTok is “especially” focused on fighting “anti-Semitism”—and it’s personal to Presser as “a member of the American Jewish community.”
  • While banning critics of Israel for “hate,” they also partnered with Israeli creators (and some non-Israeli creators) to produce positive hasbara content.
  • They have over two dozen Jewish organizations “constantly” feeding them “intelligence” on “violative trends”—which includes the WJC—and such groups help inform them on “what is hate speech.”
  • They “spend a lot of time” with Jewish/Israeli creators to find out “what other tools they might look for” in fighting anti-Semitism.

So far it looks like the new moderators are operating with a heavy hand.

Here’s how one American alt-media outlet is faring under the new regime:

Tough Transition

It’s not just heavy-handed moderation that’s troubling TikTok’s first days under new management.

The Verge headlined their piece on the platform’s issues “TikTok USA is broken.”

Key points:

Many in the US have found it impossible to upload videos over the last day or so, which are sitting “under review” indefinitely. One video we uploaded from a US account last night has yet to go live, nearly 12 hours later, while a video uploaded from the UK is published — but it’s only visible to our editors who aren’t in the US. Similarly, accounts for pages like the BBC and The Guardian only show new uploads for those of us who live outside the US, while viewing the same account from the US shows only videos uploaded before Sunday morning.

Issues that thousands of people have reported and we’ve been able to confirm include difficulty logging in, the inability to upload or publish videos, a For You Page algorithm that isn’t personalized, problems loading comments, as well as errors flashing for other features, and problems with the CapCut video editor.

Given the timing, many drew a link between TikTok’s issues, its US operation’s new Trump-friendly owners, and this weekend’s anti-ICE protests in Minneapolis, exacerbated by the killing of a second local resident, Alex Pretti, by federal agents. The combination of publishing errors and previously political For You Pages that are suddenly filled with generic content has led many to assume the worst when their videos about ICE wouldn’t publish, but at the moment, the problems appear to be much more extensive.

Previously popular TikTok anti-genocide advocate Guy Christensen has been urging his followers to migrate to a new platform called UpScrolled with the sales pitch that “It’s led by a Palestinian and promises no censorship from billionaires.”

I have to assume that TikTok will sort out its technical issues, but as with the Ellisons’ CBS News it is unclear if they will be able to create a controlled platform that retains enough popularity to be influential.

It also remains unclear what the impact of the much anticipated AI bust will be on the Ellisons’ plans for global info domination.

Related Posts:

Print Friendly, PDF & Email

Subscribe to Post Comments
4 comments

  1. IM Doc

    Just FYI, Oracle also owns and runs Cerner systems. The EHR company. Second only to EPIC in its use in America. Since I am old enough to have used them all in the past, I can very much assure you that it is the biggest disaster in the field. Colleagues who are still forced to use it now have told me that literally it has caused all kinds of mayhem up unto death in its latest configuration. My feeling is that Oracle bought Cerner about 2-3 years ago or something like that. They immediately got the VA involved in their product, and the VA began to have disasters like it has never had before.

    Am I the only one bothered by the fact that we have these big leviathan like computer companies like Oracle and Amazon ( most all of them are run on AWS in the background) with their mitts all over everyone’s personal data?

    I am not sure what would happen to the EHR field if something as big as Cerner goes under – but it sure would be fun to watch.

    Reply ↓
    1. Nat Wilson Turner Post author

      Ellison claims that Oracle’s access to private data is its hole card in the rapidly commodifying AI space.
      I’ll look into Cerner & Oracle’s acquisition thereof. Thanks!

      Reply ↓

Leave a Reply

Your email address will not be published. Required fields are marked *