Microsoft officially announced Sunday that its offer to buy TikTok operations in the United States has been rejected by the Chinese company, which sources say there are reasons behind this rejection.
Microsoft, which was previously the front-runner for US TikTok operations, lost this week to the technology giant Oracle.
ByteDance - the company that owns TikTok - and Oracle have submitted a proposal to the White House to become the "trusted technical partner" for the application in the country.
Sources familiar with the negotiations said that Bitdance CEO Zhang Yiming was upset after Microsoft described TikTok as a "security risk" that it could fix when speaking to US lawmakers.
According to Business Insider, Reuters wrote, citing sources, that "while discussing its offer with the Trump administration and US lawmakers, Microsoft annoyed Zhang because it referred to TikTok as a security risk that it could fix ...".
Sources also told Reuters that Microsoft's offer - which exceeded $ 20 billion - did not satisfy BitDance's investors.
Reportedly, the price in addition to recent statements from Beijing that it would not accept a forced sale of TikTok to an American company led to the decision to conclude a partnership deal with Oracle rather than direct sales to Microsoft.
The proposed deal from Oracle does not amount to a mass sale. Rather, it proposes a partnership whereby Oracle will manage TikTok user data in the United States.
The proposed transaction has now been submitted to the United States Commission on Foreign Investment (CFIUS) for review.
The administration of US President Donald Trump has confirmed that TikTok poses a threat to national security because it is owned by the Chinese company, ByteDance, and Washington argues that this means that user data can be handed over to the Chinese government for espionage purposes.
TikTok denies this, saying that it will never hand over user data to any government for espionage purposes, and that it cannot even if it wants to because its data is stored on US servers, and therefore it is subject to US law.
China reacted strongly when Trump signed two executive orders in early August in an attempt to force the sale of TikTok operations to a US company, with state media describing the move as a "clear burglary."
The Beijing government also succeeded in blocking the sale negotiations in late August when it announced strict new technology export controls that apply to the TikTok algorithm.