Yesterday, Microsoft was taken out of the running to purchase TikTok’s operations in the United States. According to the company, TikTok parent ByteDance pulled the plug at the last minute. Despite being the front-runner, it seems Microsoft’s bid fell apart because the company criticized ByteDance.
According to a report in Reuters, Microsoft deeming TikTok to be a security risk broke the deal. ByteDance CEO Zhang Yiming was upset by Redmond’s stance.
Microsoft registered its interest in the company back in August. The interest came following President Trump’s decision to ban TikTok from the United States. An executive order signed last month stops ByteDance from handling any transactions in the United States.
In fact, the company was meeting with ByteDance before Trump’s order, going as far as to sign a nonbinding agreement. Last month, Walmart and Microsoft reportedly joined forces on a joint effort to claim TikTok operations in the United States.
However, it now seems Microsoft was attempting to walk a line between acquiring TikTok and appeasing lawmakers. According to the company’s proposal to Trump, it would take TikTok and fix security concerns.
ByteDance has long denied any such security problems in the app and took offence to Microsoft. Source speaking to Reuters say “In arguing for its bid with the Trump administration and US lawmakers, Microsoft upset Zhang, because it referred to TikTok as a security risk it could fix …”
Those sources add Microsoft was willing to pay $20 billion for TikTok’s US operations. Instead, ByteDance took another deal, arguably one that serves its interests better. Oracle is now going to handle TikTok in the US, but only as a partner and not an owner.