ByteDance rejects Microsoft's bid to buy TikTok's U.S. operations

Microsoft is officially out of the picture in the takeover of TikTok's U.S. operations after the service's parent company ByteDance scrapped its acquisition bid. The software giant confirmed the latest turn of events today.

The company announced earlier last month its intention to buy the U.S. business of TikTok. The announcement was made after U.S. President Donald Trump signed an executive order that would ban transactions with ByteDance on September 20 over national security concerns, unless it would sell off the video-sharing platform to a U.S. firm.

However, Microsoft's plan to acquire TikTok will no longer materialize. The company said in a brief statement:

"We are confident our proposal would have been good for TikTok’s users, while protecting national security interests. 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."

Microsoft's announcement comes shortly after a report from South China Morning Post claimed that ByteDance won't sell the algorithm powering TikTok in any acquisition deal following China's move to change its export rules. Under the new policy, official permission is needed before technologies like TikTok's algorithm are brought abroad. A source briefed on the matter, however, said that the firm's U.S. team "can develop a new algorithm", although it remains to be seen how that will keep users on the platform.

Meanwhile, ByteDance has refused to sell off TikTok in the U.S. and, instead, selected Oracle as its technology partner in the country, Reuters reported today. Oracle's role will be to manage user data, although it is also reportedly considering buying a stake in TikTok as well. That said, Oracle has not officially announced this acquisition as of yet.