TikTok picks Oracle over Microsoft in Trump-forced sales bid

The owner of TikTok has chosen Oracle over Microsoft as its preferred suitor to buy the popular video-sharing app, according to a source familiar with the deal.

Microsoft announced Sunday that its bid to buy TikTok has been rejected, removing a leading suitor for the Chinese-owned app a week before President Donald Trump promises to follow through with a plan to ban it in the US.

Microsoft on Sunday said TikTok's parent company, Bytedance, "let us know today they would not be selling TikTok's US operations to Microsoft".

The Trump administration has threatened to ban TikTok by mid-September and ordered ByteDance to sell its US business, claiming national security risks due to its Chinese ownership. The government worries about user data being funneled to Chinese authorities.

TikTok denies it is a national security risk and is suing to stop the administration from the threatened ban.

Walmart had planned to partner with Microsoft on the deal. It's not clear if Walmart is still interested. Oracle has declined to comment.

TikTok also declined to comment.

Microsoft said it was confident its proposal would have been good for TikTok's users, while protecting national security interests. The company said it "would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation".

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TikTok was pushed to scout for a buyer of its US operations in July after government authorities threatened to ban the application for security reasons.

In August, TikTok CEO Kevin Meyer resigned from the company, owing to growing uncertainties around its future.

In a letter to employees, Meyer stated, "In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for. Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company."

(Disclaimer: Additional background information has been added to this PTI copy for context)