Other vendors, including Microsoft and Amazon, could also be impacted by the law. Microsoft has a contract worth over $20 million per month with ByteDance, allowing the company to access OpenAI’s large language models through a Microsoft Azure license. ByteDance also uses Amazon’s AWS web hosting service, which has recently come under scrutiny due to a partnership between the two companies. Google, which provided cloud services to TikTok in the past, could also be affected. The three companies have not yet commented on the situation.
Key takeaways:
- A court's decision to uphold the divest-or-ban TikTok law could cost America's largest cloud providers millions of dollars in contracts with TikTok and its parent company, ByteDance.
- The law prevents companies from providing TikTok or ByteDance with internet hosting services, with potential fines equivalent to the number of TikTok users who continue to use the app after the divestiture deadline times 5,000.
- Oracle, which has a $1 billion agreement with TikTok to host U.S. users' private information, plans to cease hosting this information on January 19 unless the law is prevented from going into effect.
- Other vendors, including Microsoft, Amazon, and Google, also stand to lose significant contracts due to the law. Microsoft's contract with ByteDance is worth more than $20 million per month, and TikTok has previously committed to spend more than $800 million on Google's cloud services.