ByteDance will not sell TikTok's US operations to Oracle Corp or Microsoft Corp  and will not give the source code for the video platform to any US buyers, China's state-run English television channel CGTN reported on Monday, citing sources.

People familiar with the matter told Reuters that ByteDance abandoned the sale of TikTok in the United States and decided to pursue a partnership with Oracle in hopes of avoiding a US ban.

ByteDance declined to comment on CGTN’s report.

Sources earlier said that TikTok has abandoned talks with Microsoft Corp to sell its music-video app in the US, favoring instead a business partnership with Oracle Corp.

A deal between ByteDance Ltd, TikTok’s Beijing-based parent company, and Oracle is likely to include a stake in a newly configured TikTok business, but will look more like a corporate restructuring than an outright sale, said one of the people, who asked not to be identified because the information isn’t public

A deal between ByteDance Ltd, TikTok’s Beijing-based parent company, and Oracle is likely to include a stake in a newly configured TikTok business, but will look more like a corporate restructuring than an outright sale, said one of the people, who asked not to be identified because the information isn’t public.

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Under the proposed deal, Oracle will be ByteDance’s technology partner and will assume management of TikTok’s US user data, the sources said. Oracle is also negotiating taking a stake in TikTok’s US assets, the sources added.

It is unclear whether US President Donald Trump, who wants a US technology company to own most of TikTok in the United States, will approve the proposed deal. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security risks, is overseeing the talks between ByteDance and Oracle.

ByteDance plans to argue that CFIUS’ approval two years ago of China Oceanwide Holdings Group’s purchase of US insurer Genworth Financial offers a precedent for the deal structure it is proposing with Oracle, the sources said.

In that deal, China Oceanwide agreed to use a US-based, third-party service provider to manage the data of Genworth’s US policy holders. ByteDance will argue a similar arrangement can safeguard the data of TikTok’s US users, the sources said.

The terms being discussed with Oracle are still evolving, one of the people said. For example, Oracle could take a stake of a newly formed US business while serving as TikTok’s US technology partner and housing TikTok’s data in Oracle’s cloud servers. 

Early offers from both parties valued the US business at about US$25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, said people with knowledge of the matter.

Microsoft, which was working with Walmart Inc, had been seen as the more likely winner but its talks had cooled in recent days, one person said. 

“ByteDance let us know today they would not be selling TikTok’s US operations to Microsoft,” Redmond, Washington-based Microsoft said in a statement on Sunday. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

Walmart, though, remains interested in making a TikTok investment alongside a consortium of investors led by Oracle. 

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ByteDance was negotiating bids for TikTok’s US operations under orders from the Trump administration. TikTok intends to bring a proposal to the White House ahead of a mid-September deadline imposed by Trump, a person with knowledge of the matter said.

Talk of a corporate restructuring harkens back to ByteDance’s original intentions earlier in the summer to sell a partial stake in TikTok’s operations or restructure the company with a global headquarters and board of directors outside of China. Those aspirations were complicated by Trump’s threats to ban the app in the US and subsequent executive orders, which prohibit US people and businesses from doing business with TikTok.

If ByteDance is able to get a deal through the White House that doesn’t involve an outright, forced sale, it would mark a major feat for ByteDance founder Zhang Yiming, who has been reluctant to hand over such a prized asset. 

Microsoft representatives declined to comment beyond its statement. Representatives for TikTok declined to comment, and Oracle didn’t respond to requests for comment outside normal business hours. The White House also didn’t immediately respond to a request for comment.

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Microsoft was the early front-runner for the acquisition, having started talks with ByteDance weeks before Trump’s executive orders and believing it had the preliminary framework of a deal the US government could back. But events have been moving away from the software giant in recent weeks.

Oracle, a company with a closer relationship to the US president, emerged as a bidder with the backing of Sequoia Capital, a key ByteDance shareholder.

Buying TikTok would have given Microsoft -- which owns the Xbox video-game platform and the LinkedIn professional networking site -- access to an addictive video-sharing app used by more than 100 million people in the US. The app, which lets people record and edit short video clips ranging from lighthearted lip-syncs to more serious political statements, has gained popularity during the global pandemic that’s kept many people cooped up indoors.

For corporate-software giant Oracle, TikTok is a less obvious fit, but makes sense in light of the company’s desire to build up its cloud-computing and consumer-data businesses. TikTok stores massive amounts of data and currently is a large customer of cloud services run by Amazon Web Services and Alphabet Inc’s Google. 

For Oracle, a deal with TikTok gives the 43-year-old software maker best known for legacy corporate databases a trove of consumer information to bolster an advertising business. Oracle creates profiles of ordinary people and sells them to companies looking to reach specific audiences. The deal also buoys Oracle’s attempts to expand its cloud-computing business, providing a massive network that TikTok could use to run its application and store data via the internet.

Oracle has nurtured a relationship with Trump since before his administration began. In 2016, Chief Executive Officer Safra Catz served on the president’s transition team, and two years later, dined with him at the White House, where she complained about a government contract she deemed unfair, Bloomberg reported. 

Vice President Mike Pence visited Oracle’s headquarters in Redwood City, California. Catz has contributed more than US$125,000 this year to support Trump’s re-election, according to Federal Election Commission data. And Ellison let Trump use one of his California estates to hold a fund-raiser in February.

In recent weeks, the US president had publicly endorsed the Oracle bid and called Ellison a “tremendous guy.” Trump economic adviser Peter Navarro, who earlier came out against a potential sale to Microsoft and had at one time advocated banning TikTok completely, echoed that endorsement during an August appearance on Fox News.