Only days before ByteDance’s deadline to sell TikTok, Microsoft said its bid to purchase the social video app has been rejected.
“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” the company said in a statement on its website. “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.”
While an odd match, Microsoft was widely seen as the likeliest American company to acquire the explosively popular social video app. Microsoft, known for its prowess in personal computing, productivity software, and cloud services, also owns the Xbox gaming properties which share a similarly young audience with TikTok.
Microsoft’s bid was further bolstered by an acquisition partnership with Walmart, though it was unclear how the two would split ownership of the app. Media buyers told Adweek recently that while they were unsure about Microsoft owning TikTok, the addition of Walmart hinted at a TikTok more integrated with ecommerce offerings.
The Wall Street Journal, The Washington Post and The New York Times reported late Sunday, citing anonymous sources, that Oracle was selected as ByteDance’s “technology partner” in the U.S., though it was unclear how the pair would function moving forward.
Spokespeople for TikTok, and those believed to be in the race to acquire the app—Microsoft and Oracle—did not immediately respond to a request for comment Sunday evening.
“Walmart continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties,” Walmart spokesperson Randy Hargrove told Adweek Sunday night. “We know that any approved deal must satisfy all regulatory and national security concerns.”
ByteDance, a Cayman-based company with Chinese origins, is facing a Sept. 20 deadline to sell TikTok in order to comply with an executive order, issued on Aug. 6, from the Trump administration. The order, which was the first of two that Trump signed directed at TikTok, says that business “transactions” with ByteDance will be illegal after Sept. 20. President Donald Trump previously gave his blessing to the Microsoft bid after a conversation with its CEO Satya Nadella and both Trump and Microsoft said they wished to complete the deal by Sept. 15.
ByteDance and TikTok recently sued the U.S. government over the Aug. 6 executive order, saying it violated the company’s First and Fifth Amendment rights, among other claims, but the case is still ongoing. Another deadline, Nov. 12, still lingers even if the courts strike down the earlier deadline, which takes effect next Sunday.