The Redmond, Wash.-based tech giant was seen as a front-runner to acquire TikTok after President Trump set a mid-September deadline for reaching an agreement to continue TikTok's U.S. operations.
Oracle is now the only other company reportedly involved in acquisition negotiations. The reported purchase price is between $20 billion and $30 billion.
Oracle might seem like an unlikely candidate given its focus on enterprise software and lack of social media market share, but it's worth noting that co-founder and executive chairman Larry Ellison is a Trump supporter. The acquisition could also help the company's advertising and data business. Oracle is reportedly working with TikTok's existing U.S. investors, including General Atlantic and Sequoia Capital.
In a statement, Microsoft said its plan to acquire TikTokwould have been good for the app's users while meeting "the highest standards" for security and privacy.
"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," the company said in a statement Sunday. "We are confident our proposal would have been good for TikTok's users, while protecting national security interests. To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas."
In early August, Microsoft said it was negotiating the purchase of TikTok's service in the U.S., Canada, Australia, and New Zealand, planning to own and operate the service in those markets if it could reach a deal with ByteDance.
At the time, Microsoft said it "would ensure that all private data of TikTok's American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred."
Microsoft said previously it was working with Walmart on its bid.