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ByteDance Rejects Offers For TikTok's U.S. Operations

RACHEL MARTIN, HOST:

There are just days left for TikTok. If it's not sold to an American company, the video-sharing app will be banned in the U.S. Microsoft was seen as the most likely buyer. But TikTok's Chinese parent company has now rejected Microsoft's offer. NPR's Bobby Allyn joins us with the latest. Bobby, good morning.

BOBBY ALLYN, BYLINE: Hey. Good morning.

MARTIN: There was all kinds of talk about this big deal with Microsoft. What happened to it?

ALLYN: Yes. So in short, it was turned down by ByteDance. Dance if you remember, that's TikTok's Beijing-based parent company. And, you know, this really hurt Microsoft. Microsoft was really gunning to acquire TikTok. And it's because it would've been a gold mine of data on young people, you know, on one of the world's fastest-growing apps. Microsoft has the money and the technical know-how to operate it. But yeah, in a statement Sunday, Microsoft says its offer was rejected. And they didn't explain why, but they did say their proposal would have protected national security interests, which is how we ended up here in the first place.

MARTIN: So let's talk about this deadline. I mean, President Trump has said that TikTok poses a national security threat because it's operated out of China. The president is saying that he's going to force TikTok to shut down if they can't sell it to an American operation. So, I mean, now that this Microsoft deal has fallen through, what happened?

ALLYN: Right. So Trump says TikTok has no choice but to find a buyer by Tuesday - so tomorrow. But in an executive order the president signed, TikTok actually has another five days after that. But that's not really much time in the deal-making world to try to figure this out, right? So, I mean, Microsoft having its offer rejected definitely makes it more likely that TikTok could go away forever in the U.S. But it still could be saved, right, Rachel? All hope is not lost. Others are still in talks with TikTok.

MARTIN: Do we know who the others are?

ALLYN: Yes. So the Wall Street Journal reports that TikTok is expected to name software company Oracle as its, quote, "trusted tech partner." Now, what does that mean? I have no idea. And most people don't know, either. Now, Chinese state TV has another take out today. They're saying that neither Microsoft nor Oracle will be buying TikTok. It's unclear how definitive that report is. But in any case, Oracle would be a really odd partner here. I mean, it sells database products to mostly businesses. It has no experience operating a social media company. It doesn't even sell any major consumer products. Analyst Dan Ives was among the technology watchers I talked to who is equally as confused.

DAN IVES: The Oracle technology partnership, which I think to many is still a head scratcher - is that enough to keep this app alive?

ALLYN: Right. So that's the key question - is whatever Oracle and TikTok hammered out enough to satisfy the Trump administration so that they will cool their pressure on the app and let it survive? We just don't know yet.

MARTIN: And China itself has sort of thrown a wrench into this - right? - doing some things that are delaying talks.

ALLYN: That's right, yeah. So in the middle of these talks, China passed a new rule restricting how a foreign buyer - say, an American company like Microsoft...

MARTIN: (Laughter).

ALLYN: ...Could - yeah, could take on a Chinese algorithm. And TikTok is popular because it has this amazing algorithm, right? I mean, it's really seen as kind of the secret sauce of TikTok. It's what makes it very personalized. It's what makes, you know, videos just go viral really, really fast. So can TikTok be sold without its treasured algorithm? Would TikTok even be TikTok without it? I mean, these are really big questions right now.

MARTIN: And just to end, just to step back, how exceptional is this situation now with President Trump putting this kind of pressure on a private company?

ALLYN: Yeah, I mean, unprecedented, as you know, Rachel, is a term we hear thrown around a lot in the Trump era. And I don't think it would be a stretch to use it here. I mean, the president using the power of his office to force an overseas company to sell its business in the U.S. is very, very unusual. But still, that's the situation TikTok is now facing.

MARTIN: NPR's Bobby Allyn, thank you.

ALLYN: Thank you, Rachel. Transcript provided by NPR, Copyright NPR.