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Microsoft says its offer for TikTok was rejected in the standoff between the US and China



WASHINGTON – Chinese app owner TikTok rejected an offer from Microsoft on Sunday to take over the company’s U.S. operations, Microsoft said, as time runs out on an executive order from President Trump threatening to ban the popular app at unless its American operations are sold.

Microsoft was seen as the American tech company with the deepest pockets to buy TikTok’s US operations from its parent company, ByteDance, and with the utmost ability to address the national security concerns that led to Trump’s order. The move leaves Oracle – one of the few Silicon Valley companies to publicly ally with Trump ̵

1; as the only remaining publicly known bidder for TikTok.

ByteDance indicated that Oracle would be its “technology partner,” but it was unclear whether that meant it would also take a majority stake in the app, according to people involved in the negotiations.

“ByteDance let us know today that they would not sell TikTok’s US operations to Microsoft,” Microsoft said in a statement. “We are confident that our proposal would be positive for TikTok users, protecting the interests of national security.”

Oracle hasn’t said anything publicly about what it would do with TikTok’s underlying technology, which is written by a team of Chinese engineers in Beijing and which Secretary of State Mike Pompeo has accused is accountable to Chinese intelligence agencies. This is a major concern of US intelligence agencies, led by the National Security Agency and the US Cyber ​​Command, which have warned internally that anyone who checks the computer code could be channeling – or censoring – a range of politically sensitive information. to specific users.

Oracle was also ready to provide the administration with a system earlier this year to help with a planned study that would allow for the broad release of the malaria drug hydroxychloroquine for the treatment of Covid-19. While doctors had warned that the drug could have dangerous side effects, Mr. Trump had promoted its possible use to treat coronavirus-infected patients.

Oracle’s relationship with the administration attracted attention. In August, an informant from the Department of Labor said Mr. Trump’s secretary of labor Eugene Scalia intervened in a pay discrimination case involving the company.

In a call to discuss Oracle’s earnings last week, Ms. Catz preemptively told analysts that she and Mr. Ellison would not discuss reports on their offer for TikTok.

The rise of TikTok in the United States has been remarkably rapid; it has only taken off in the last two years. ByteDance, founded in 2012, has raised billions of dollars in funding, valuing it at $ 100 billion, according to PitchBook, which follows private companies. Its investors include Tiger Global Management, KKR, NEA, SoftBank’s Vision Fund and GGV Capital.

In July, as pressure from the US government escalated, ByteDance began discussions with investors to carve out TikTok.

But the deal quickly becomes a free for all with offers from various companies and investment entities around the world and new requests from the US and Chinese governments.

As the deal progressed, two of ByteDance’s biggest supporters, Sequoia Capital and General Atlantic, sought to keep their stakes in its treasured subsidiary by saving TikTok from a ban in the United States. Both companies are represented on the ByteDance board of directors.

In late August, the companies partnered with Oracle to bid against Microsoft. Microsoft, meanwhile, has teamed up with Walmart to make its offer.

David E. Sanger and David McCabe reported from Washington; Erin Griffith reported from San Francisco.


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