HONG KONG/PALO ALTO, U.S. -- Microsoft has dropped its bid for TikTok, leaving rival Oracle in pole position in the race to strike a deal over the Chinese video streaming app, which has been ordered to sell its U.S. operations to an American company or face being shutdown.
"ByteDance let us know today they would not be selling TikTok's U.S. operations to Microsoft," the American technology giant said in a blog post on Sunday night in a reference to the Chinese parent of TikTok. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests," the statement continued.
TikTok is approaching a critical moment. U.S. President Donald Trump last week refused to extend the Sept. 15 deadline for ByteDance to sell TikTok's American assets, citing national security grounds.
"It'll either be closed up or they'll sell it," Trump said. "There will be no extension of the TikTok deadline."
ByteDance has been involved in negotiations with bidders for months, and Microsoft's withdrawal leaves Oracle as the most promising bidder. However, Beijing's recent move to curb exports of artificial intelligence technology has cast doubt on the likelihood of a sale.
While the exact nature of a possible deal between Oracle and TikTok remains unclear, gaining access to the app's more than 100 million U.S. users could be a golden opportunity for the enterprise software giant. Oracle, which does not currently have any consumer-facing operations, is looking to broaden its client base by building up its cloud services and consumer-data businesses.
Trump has voiced his support for the California-based company's bid, calling Oracle "a great company." Larry Ellison, Oracle's co-founder and executive chairman, is one of the few outspoken Trump supporters in Silicon Valley. The tech billionaire hosted a fundraising event for the president earlier this year.
Microsoft did not elaborate on the reason behind ByteDance's rejection. Neither TikTok nor Bytedance responded to Nikkei Asian Review's request for comment. Oracle could not immediately be reached for comment.
TikTok, combined with its Chinese version, Douyin, is one of the world's most popular apps, with more than 2 billion global downloads as of April, according to app tracker Sensor Tower.
Oracle, based in Redwood Shores, California, does not currently have any consumer-facing business. The 43-year-old company is expanding from its database provider roots and attempting to build up the cloud service and consumer-data businesses.