Microsoft's bid for TikTok rejected in the US

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Washington | The owner of the Chinese app TikTok rejected an offer on Sunday (Monday AEST) from Microsoft to take over the company's US operations, say Microsoft officials and other people involved in the negotiations, as time runs out on an executive order from President Donald Trump threatening to ban the popular app unless its US operations are sold.

Microsoft was seen as the US technology company with the deepest pockets to buy TikTok's US operations from its parent company ByteDance, and with the greatest ability to address national security concerns that led to Trump's order. The move leaves Oracle — one of the few Silicon Valley firms to publicly ally with Trump — as the sole publicly known remaining bidder for TikTok.

ByteDance has indicated Oracle would be its "technology partner," but it was unclear whether that meant it would also take a majority ownership stake of the app.

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US President Donald Trump with Microsoft's Satya Nadella back in 2017.  AP

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," Microsoft said in a statement. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests."

ByteDance declined to comment. A spokeswoman for Oracle did not immediately respond to a request for comment.

Microsoft said in August it would insist on a series of protections that would essentially give it control of the computer code TikTok uses for the US and many other English-speaking versions of the app. Weeks later, China issued new regulations that would essentially bar TikTok from transferring its technology to a foreign buyer without explicit permission from the Chinese government.

Oracle has said nothing publicly about what it would do with TikTok's underlying technology, which is written by a Chinese engineering team in Beijing – and which Secretary of State Mike Pompeo has charged is answerable to Chinese intelligence agencies. That is a major concern of US intelligence agencies, which warned internally that whoever controls the computer code could channel – or censor – politically sensitive information to users.

On August 6, Trump issued an executive order saying TikTok must essentially strike a deal to sell off its US operations by September 20. He later issued a second executive order giving ByteDance a few weeks after that to close a sale.

Even if Oracle may try to close a deal, it is unclear whether Beijing would create new obstacles to the process.

The New York Times