Microsoft officially announced that ByteDance rejected its purchase offer and Oracle will be its American technology partner. Oracle confirmed on Monday, Sept. 14, that its offer was presented together with ByteDance to the U.S. Treasury Department.

In a statement on its official website, Microsoft announced on Sunday, “ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft. We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

To the surprise of many, ByteDance, TikTok’s Chinese parent company, chose Oracle as its U.S. technology partner. According to The Associated Press (AP), Oracle, on Monday, confirmed that its offer was submitted with ByteDance to the Treasury Department implying that the Chinese firm had already accepted its purchase bid.

The Trump administration warned in August through an executive order that it would prohibit the use of TikTok and ordered ByteDance to sell its business to a local firm as a condition of continuing operations in the United States, citing national security risks due to the history of Chinese companies in information theft.

The White House in recent months has not only targeted TikiTok, it has cracked down on a variety of Chinese companies, including telecommunications equipment manufacturers Huawei and ZTE and the WeChat messaging application, over concerns that Chinese firms possess a huge amount of user data in the United States and then transfer it to the Chinese Communist Party (CCP) without knowing what uses it would be put to. Republican and Democratic lawmakers have also expressed concern about censorship and children’s privacy.

While TikTok denies that it has shared user data with the CCP or that it would do so if asked, it also could not prove otherwise. At the same time, the company is also accused of censoring videos at the request of CCP authorities.

The situation created by the ban has exacerbated the tension in the relationship between the CCP and the United States. 

According to AP, in late August the CCP revealed new internal regulations restricting technology exports, which probably includes the artificial intelligence system used by TikTok to choose which videos to send to its users. That means ByteDance would have to obtain a special license from China in order to export such technology to a foreign company.

Both Microsoft and Oracle are better known for the development of business software than for the production of mass consumer applications such as TikTok.

Oracle primarily manufactures database software and competes with technology giants such as Microsoft and Amazon that provide cloud services, as well as with business software specialists such as Salesforce. If the purchase of TikTok is confirmed, it would be the first time it would be involved in the development of technology aimed at the masses.

Oracle co-founder Larry Ellison is one of the few in the technology sector who publicly supports President Donald Trump. He even organized a fundraiser for him in February at his farm in Rancho Mirage, California.

Oracle also has the support of President Trump, who in mid-August said while answering questions during an event at the White House, “Oracle is a great company,” adding that the owner, billionaire Larry Ellison, is a “tremendous person” and the software company “could handle TikTok,” according to FoxBusiness.

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