ByteDance rejects Microsoft's offer for TikTok's US operations

TikTok logo
TikTok logo (Image credit: Daniel Rubino / Windows Central)

What you need to know

  • Owners of TikTok, ByteDance have rejected Microsoft's bid.
  • Oracle announced that it has proposed a deal that will see it become a "trusted technology provider."
  • The U.S. government still needs to be approved Oracles deal with ByteDance.

The long, ever-changing landscape of the TikTok drama with the Trump administration at least has one chapter now closed: Microsoft. On late Sunday, Microsoft announced the news in a terse public statement (opens in new tab). The full statement from Microsoft reads in full:

ByteDance let us know today they would not be selling TikTok's US operations to Microsoft. 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.

The New York Times sheds light on the story noting that this leaves only Oracle in the running – a company with public allegiance to Trump. ̶W̶h̶i̶l̶e̶ ̶a̶n̶ ̶o̶d̶d̶ ̶f̶i̶t̶,̶ ̶O̶r̶a̶c̶l̶e̶ ̶l̶i̶k̶e̶l̶y̶ ̶h̶a̶s̶ ̶t̶h̶e̶ ̶c̶a̶p̶i̶t̶a̶l̶ ̶t̶o̶ ̶d̶o̶ ̶s̶o̶m̶e̶t̶h̶i̶n̶g̶ ̶w̶i̶t̶h̶ ̶t̶h̶e̶ ̶p̶o̶p̶u̶l̶a̶r̶ ̶s̶o̶c̶i̶a̶l̶ ̶n̶e̶t̶w̶o̶r̶k̶.̶ ̶B̶o̶t̶h̶ ̶B̶y̶t̶e̶D̶a̶n̶c̶e̶ ̶a̶n̶d̶ ̶O̶r̶a̶c̶l̶e̶ ̶d̶e̶c̶l̶i̶n̶e̶d̶ ̶t̶o̶ ̶c̶o̶m̶m̶e̶n̶t̶ ̶t̶o̶ ̶t̶h̶e̶ ̶N̶e̶w̶ ̶Y̶o̶r̶k̶ ̶T̶i̶m̶e̶s̶.̶

Update, September 14 (10:30 am ET): Oracle confirmed in a statement that it is "part of the proposal submitted by ByteDance to the Treasury Department over the weekend in which Oracle will serve as the trusted technology provider."

While no apparent reason was revealed as to why TikTok rejected Microsoft's bid, the Times reported the U.S. takeover's breadth would have to be significant for Microsoft, making ByteDance skittish:

The Chinese regulations helped scuttle the effort by Microsoft, which said the only way it could both protect the privacy of TikTok users in the United States and prevent Beijing from using the app as a venue for disinformation was to take over the computer source code underlying the app, and the algorithms that determine what videos are seen by the 100 million Americans who use it each month.

Oracle, at least publicly, has not committed to such stringent requirements.

The TikTok soap opera with Microsoft began on August 6th. The saga quickly spiraled into madness after that with Walmart entering the fray, Bill Gates chiming in, and plenty of impromptu demands from the Trump administration (not to mention China).

For now, Microsoft appears to have dodged a bullet that may have been politically unpopular in the long term.

Daniel Rubino

Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics, watched people sleep (for medical purposes!), and ran the projectors at movie theaters because it was fun.

  • With many of Microsoft’s acquisitions, even to their own detriment, Microsoft will take a hands off approach. I can’t shake the feeling that Oracle will ruin Tiktok by using it as a vehicle to make a quick buck. I could see advertising overload to the point where users get so annoyed they move to another platform. And I can see Oracle being so inexperienced in the consumer social media space that they make numerous changes for the "better" but it only drives people away.
  • it really is a weird fit for them. Like, if you were against Microsoft taking them over, you really can't be for Oracle. Just too strange. But hey, it IS 2020, so ...
  • Unless Oracle or whoever buys TikTok gets the source code and algorithms then the Trump Administration will ban TikTok. I spent 22 years in the military and TikTok is banned from soldiers use, so I not surprised with the Federal Governments stance. Chain has stolen too many technology secrets over the years.
  • Without the source code and algorithms Oracle is buying an app name.
  • I don't see either the US or China accepting this deal unless it's merely an optics play by Trump. If Oracle is merely a host provider, that won't mitigate the "security risk". Oracle will merely become a data storage place and TikTok can still phone home if they like. And in that case, I can't see the US accepting it. I also don't see China accepting the co-opt of a Chinese company. In any case, TikTok was a risky play for Microsoft. Extremely high risk, high reward. The risk being if Microsoft did acquire TikTok, good luck being successful in China afterward. But if they did acquire TikTok with its algorithm, they would essentially be capturing lightning in a bottle. It's rare to have the opportunity to capture such a hot property. It's something that Apple, Google, or FB would love to capture if they didn't already have a bulleye on them because of current and past behavior.
  • In some ways, I'm sort of relieved about this. Never really wanted Microsoft involved in the whole TikTok saga. Glad it is over.
  • Maybe TipTok is playing the wait and see if US gets another president. No one really kn8ws what can and will change if the Potus changes.
  • I halfway not surprised that Microsoft is abandoning its bid for Tik Tok. The details as to why Microsoft stepped back will come out over the next few days and weeks. Speculating, when I read that China erected licensing requirements for AI exports on August 30, partly in response to the Tik Tok sale, that appeared to the detail that would kill the deal for Microsoft. The massive scale and growth Tik Tok provided, to my understanding, was predicated on its software that kept users engaged. Without that software the value of the company is fundamentally changed. My understanding is Oracle was willing to do a deal without the software component. Now all they have to do is close the deal. We will see how that works out. This could still fall apart. With that said, Oracle? I am perplexed by this move. I don't get the strategic value here. I clearly need more schooling about why this makes sense for Oracle, they are not fools, they have an angle figured out that I don't understand. And so ends, a weird chapter in Microsoft's history. With this out of the way we can back to obsessing over the Surface Duo. In other news tonight, Nvidia bought ARM from Softbank for $40 billion. This should be very interesting going forward.
  • Oracle needs a high profile client for theit cloud business.
    Without it they are a distant fifth in a four horse race. As for MS, they dodged a bullet.
    Even if they had gotten the source and user data, there will never be any guarantee the CCP doesn't *already* have the data. Gates was right: it is a poison chalice. That's why it's best Oracle gets...whatever they get.
    They won't be missed when it all blows up. 😁
  • I didn't really mind Microsoft having TikTok in their arsenal, what's more worrying is this pattern that is emerging that the president doesn't like a company and so gets rid of it aka Huawei, which I can understand about being worried about because of its ownership, however, I thought you had to at least meant to base your theory or objection on some evidence, which as far as I know they didn't, because the hardware and software were both checked before being rolled out into mainstream infrastructure (4G/5G), but no, as far as I can see they were banned because they were becoming popular and taking over the American Market, I think its the same with TikTok which might have been used to exaggerate his Rally numbers, so he decides it needs to be sold, when security advisers have said other apps are as dangerous or more so, like Snapchat, where security of personal data is concerned, I think they really made a mistake here, where Huawei used to buy hardware and software from America, he has made them a lot more independent of America, and can now be successful without buying from Google or Snapdragon, so I think he's made Huawei a lot more prosperous without giving business to America, which is surely to their disadvantage...not to mention not having the latest hardware infrastructure of 5G, which is going to slow down technological advantage in having the latest technology and using IoT and Autonomous vehicles which make use of 5G, I mean what's next, Goodyear Tyres, Twitter, YouTube, Facebook??? Apologies for rant...
  • Do some research.
    Huawei and ZTE are owned by high level chinese military officers and are required by Chinese law to provide CCP oficials with everything and anything they ask.
    In contrast, MS has fought the US goverment in court to avoid delivering customer data.
    There is ample reason to do everything to avoid making things easier for chinese IP thieves.
    And it's not just the US avoiding the chinese companies like the plague.
  • If I'm not mistaken isn't the president of Oracle Trump's personal buddy let alone did a bunch of fundraisers for that creature. So with how corrupt this falling Empire of the u.s. government is I'm not surprised this happened 😇
    oh well now I shall go and delete my Tik Tok account it was a fun three months.
  • New York Times is right on the "money" imo. This whole saga feels more off then a century old rotten cheese. I wouldn't be surprised if there are federal indictments down the line.
  • I'm disappointed there is no way to be shut down now.
  • In this world right now, Facebook is the only actual threat to democracy. Followed by Twitter. TikTok is just silly videos.
  • True, but what's to stop wannabe authoritarians like Trump from corrupting other social media platforms to push llies and propaganda?
  • Ehh, they’re all authoritarians really, I just don’t mind Trumps ideas. But for the other side...? Explain why everyone is moving away from NY and California every single day... you can’t even find a decently priced rental truck to move out!
  • Amazon is quietly moving employees from Seattle to Redmond.
    They go tired of lobbying against ever increasing taxes so they're building a 25,000 employee complex in Redmond, as of last week.
  • Wow, that's a whole load of crap. I can guess which 24-hour news channel is on lock in your house. NY and CA are expensive because so many people want to live there - there just aren't enough houses. America's future is diverse, educated, high-tech - the opposite of whatever you're probably thinking.
  • Californian's are leaving Calfornia in masses. States like Texas, Arizona, Idaho and several others have seen booming housing starts and sales due to it. They don't want to live there for multiple reasons.
  • The head of Oracle is Trump's buddy so you can bet they bought it for a nefarious purpose. Trump is pathetic.
  • Indeed he is, hopefully tiktok will also decline Oracles offer
  • This is good news, I really hope that Oracles bid is also declined, as I think it will. The whole point of the barriers put up recently by the Chinese government is to prevent the forced sale of tik tok, irrespective of which American company would buy it.
  • TikTok is another fad app that will be replaced in a few years or less. I am very glad Microsoft didn't win this one. To me I wish they would all go away. A lot of wasted time and energy. Can you imagine what teenagers loading up on ships heading to Normady Beach during WW2 would think of our youth today and all the time they waste on stuff like this.
  • Yet another result of strongman economic policy from the disgraceful Trump White House. Get used to it if Biden only wins the popular vote by 3 or 4%.
  • The popular vote does not matter. You have to win a majority of the country. A majority in NY, Chicago and LA is not enough. It is setup that way for a reason. The U.S. is not a Democracy. It is a Republic. Hint: “And to the Republic, for which it stands...”
  • Nice Rejection....! Microsoft does not have any business in TikTok…..! BTW- the Oracle bid is also dead in water because of Chinese new export law...!