Microsoft’s Bid for TikTok Rejected by ByteDance

Taylor Soper, GeekWire
Taylor Soper is GeekWire's managing editor, responsible for coordinating the newsroom, planning coverage, and editing stories. A native of Portland, Ore., and graduate of the University of Washington, he was previously a GeekWire staff reporter, covering beats including startups and sports technology. Follow him @taylor_soper and email taylor@geekwire.com.
Microsoft’s Bid for TikTok Rejected by ByteDance

Microsoft will not acquire TikTok's U.S. operations after ByteDance rejected the company's offer.

The Redmond, Wash.-based tech giant was seen as a front-runner to acquire TikTok after President Trump set a mid-September deadline for reaching an agreement to continue TikTok's U.S. operations.

Oracle is now the only other company reportedly involved in acquisition negotiations. The reported purchase price is between $20 billion and $30 billion.

Oracle might seem like an unlikely candidate given its focus on enterprise software and lack of social media market share, but it's worth noting that co-founder and executive chairman Larry Ellison is a Trump supporter. The acquisition could also help the company's advertising and data business, The Guardian noted. Oracle is reportedly working with TikTok's existing U.S. investors, including General Atlantic and Sequoia Capital.

In a statement, Microsoft said its plan to acquire TikTik would have been good for the app's users while meeting "the highest standards" for security and privacy.

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," the company said in a statement Sunday. "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 Trump administration is citing suspicions that China-based owner ByteDance is sharing user data with the Chinese government. ByteDance and TikTok have denied those allegations.

One potential roadblock to Microsoft's offer was China's new export restrictions on AI technology, which put control of TikTok's core algorithms in question.

In early August, Microsoft said it was negotiating the purchase of TikTok's service in the U.S., Canada, Australia, and New Zealand, planning to own and operate the service in those markets if it could reach a deal with ByteDance.

At the time, Microsoft said it "would ensure that all private data of TikTok's American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred."

Microsoft said previously it was working with Walmart on its bid.

In an executive order issued Aug. 6, Trump cited a "national emergency with respect to the information and communications technology and services supply chain" as the reason for the moratorium.

Trump has repeated that the federal government should be paid as part of a deal with TikTok, though The New York Times reported last month that "no one knows how that'd work."

This story was originally published on GeekWire.

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