Oracle will be announced as TikTok’s “trusted tech partner” in the U.S., the Wall Street Journal reported, citing an unidentified source. The eventual deal won’t be structured as an outright sale, the Journal 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. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

Microsoft, which was working with Walmart Inc., had been seen as the more likely winner earlier in the process, but its talks have cooled, a person with knowledge of the matter said earlier today. Microsoft hadn’t been 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. That’s given competitor Oracle Corp. an upper hand in the negotiations.Play Video

Microsoft said in its statement that it was prepared to make changes aimed at addressing U.S. national security concerns. “To do this, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation, and we made these principles clear in our August statement. We look forward to seeing how the service evolves in these important areas.”