TikTok Rejects Microsoft Acquisition Offer, Future Unclear For Oracle Bid

Microsoft says it was informed by TikTok owner ByteDance that its acquisition bid was rejected.

Microsoft said its bid to acquire TikTok’s U.S. operations has been rejected, while reports suggest Oracle is either set to make the acquisition or may just become a partner instead.

Microsoft and Oracle had been in talks with TikTok’s owner, China-based ByteDance, to acquire the U.S., Canada, Australia and New Zealand operations for the popular social media app. Microsoft’s bid had included Walmart as a participant.

[Related: TikTok Deal Could Come Soon With Either Oracle Or Microsoft: Reports]

In a statement posted on its website Sunday, Microsoft said its deal for TikTok is dead.

“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” the Redmond, Wash.-based tech giant said.

“We are confident our proposal would have been good for TikTok’s users, while protecting national security interests,” Microsoft said. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”

TikTok features short videos posted by users and has emerged as a hugely popular social app in the U.S. in recent years, particularly among younger users.

Reports had previously indicated that Oracle was the front-runner in the competition for TikTok. Larry Ellison, Oracle’s co-founder and chief technology officer, is a friend and supporter of President Donald Trump, who has called for a ban on TikTok unless it divested its U.S. operations. The White House has aired concerns that TikTok could be used by the Chinese government to acquire data on Americans, and Trump has set a Sept. 15 deadline for an acquisition of TikTok’s U.S. operations to be completed.

On Sunday, NBC News reported that Oracle has reached an agreement to acquire the TikTok U.S. operations. Reuters, however, reported that ByteDance has actually “abandoned” plans to sell TikTok in the U.S. “in pursuit of a partnership with Oracle.” ByteDance hopes that the move would “spare it a U.S. ban while appeasing the Chinese government,” Reuters reported.

CRN has reached out to Oracle and TikTok for comment.

The developments Sunday suggest that “TikTok’s days in the US likely are numbered with a shutdown now the next step,” wrote Daniel Ives, managing director for equity research at Wedbush Securities, in a note to investors.

“We believe Microsoft would only buy TikTok WITH its core algorithm which the Chinese government and ByteDance was not willing to budge,” Ives wrote. “While Oracle is technically the remaining bidder, without willing to sell its core algorithm we see no TikTok sale on the horizon heading into the September 15th deadline. Oracle could be a technology partner, but a sale/divestiture of the US operations for TikTok remains the focus.”