Microsoft has confirmed that it’s shelving its plans to acquire the popular Chinese video-sharing app, stating that its bid was rejected by TikTok owner ByteDance. For some months now, Microsoft seemed to be on pole position to acquire the embattled company and there was confidence a deal would be finalized in the first weeks of September. But it seems everything has fallen apart.
TikTok has been embroiled in a spat with the Trump administration. The White House earlier threatened to ban the app from operating in the US, citing national security concerns. Trump did, however, give the video-sharing platform a workaround. If it were to let a US company acquire its US operations, then it would be allowed to develop its presence in the country.
Soon after, interest on TikTok surged. It’s after all a popular app in the US, with over 100 million American users right now. Although it was understood that several US tech giants were in for the Chinese company, it looked almost certain that Microsoft would be the ultimate winner. In a statement released shortly after the deal failed, Microsoft noted that it was “confident the proposal put forward would have been good for TikTok users while protecting national security interests.”
Microsoft also noted that part of its proposal would have involved making “significant changes to the service in order to meet high-security standards, online safety, and privacy.” But it seems TikTok didn’t want to bulge. For now, there aren’t any other deals on the table for the video-sharing app. It’s therefore inevitable that its operations in the US will be halted.
However, unconfirmed reports indicate that Oracle, another US tech giant, could be in for TikTok’s US operations. Oracle was one of the companies rivaling Microsoft during the early stages of this potential buyout. But the company’s interest died down as it looked clear to everyone Microsoft was on track to close a deal. Now that the Windows giant is out of the way, it wouldn’t be a surprise if Oracle jumps back in. But even then, the underlying issues raised by Microsoft will still need to be addressed.
It will also be interesting to see if the Trump administration will consider adding a grace period for ByteDance to find a buyer for its US operations. It was believed that Microsoft wanted to buy TikTok’s global operations, not just the US. The Windows giant was rumored to be pursuing a deal to acquire TikTok in the US, Canada, Australia, and New Zealand in case it wasn’t able to convince ByteDance to sell globally.
But now that the US proposal has fallen through the cracks, it’s safe to say that Microsoft’s interest in TikTok is as good as dead. Nonetheless, Microsoft noted that it was looking forward to seeing how the video-sharing app will revolve around the issues of privacy, national security, and online safety in the near future.