Early offers from both parties valued the U.S. business at about $25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports, according to people, asking not to be identified as the information isn’t public.

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. Microsoft wasn’t asked to make revisions to its initial offer in the face of recent signs of opposition to a deal from Chinese government officials, the person added.

“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.”

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 U.S. business while serving as Tiktok’s U.S. technology partner and housing TikTok’s data in Oracle’s cloud servers.

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.

One person familiar with the deliberations in the White House said it’s unclear whether a deal with Oracle will pass muster with the Trump administration, where various factions have been pushing for a complete shutdown or an outright sale of TikTok to an American company.

Representatives for TikTok and Microsoft declined to comment, and Oracle didn’t immediately respond to a request for comment outside normal business hours. The White House also didn’t immediately respond to a request for comment. Dow Jones reported earlier that Oracle is set to be named TikTok’s “trusted tech partner” in the U.S.

TikTok was fielding bids for its U.S. operations under orders by the Trump administration, which has said the company’s Chinese ownership threatens national security. TikTok intends to bring a proposal to the White House ahead of a mid-September deadline imposed by U.S. President Donald Trump, a person with knowledge of the matter said, and any bid will also need the blessing of government officials in Beijing.

Owning TikTok would have given Microsoft access to an addictive video-sharing app used by more than 100 million people in the U.S. The site, which lets people record and edit short video clips ranging from lighthearted lipsyncs to more serious political statements, has gained popularity during the global pandemic that’s kept many people cooped up indoors.

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 U.S. 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 U.S. president, emerged as a bidder with the backing of Sequoia Capital, a key ByteDance shareholder.

For Oracle, TikTok is a less obvious fit, but makes sense in light of the software 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 of Amazon Web Services and Alphabet Inc.’s Google. A partnership with TikTok also resonates with Oracle Chairman Larry Ellison’s cheerleading for American tech interests.

Shortly after bids were submitted, the Chinese government announced a plan to be closely involved in approval of any deal and opposition to exporting key algorithms needed in the sale, one of the people said. ByteDance appeared eager for a more limited sort of agreement than Microsoft wanted, where it would retain more control, one of the people said.