Chinese owner ByteDance rejected Microsoft’s offer, and comes just a week before President Donald Trump’s threatened ban on the app – claiming national security risks – is due to come into force.
US President Donald Trump gave a 15 September deadline for the Chinese-owned app to sell or shut down.
The Trump administration claims TikTok and other Chinese apps are national security threats.
Trump had ordered the sale of TikTok’s operations in the US, where it has 100 million users.
ByteDance has been in talks to either sell to Oracle or a consortium led by Microsoft, and including retail giant Walmart.
But those talks were thrown off track after China updated export control rules last month – giving it a say over the transfer of TikTok’s algorithm to a foreign buyer.
Instead, news agencies reported, ByteDance will pursue a partnership with Oracle that it hopes will spare it from a US ban while also allaying any concerns from Beijing.
TikTok is best known for short video clips that go viral on social media, especially among young people, but American officials are worried that user information could find its way into the hands of the Chinese government.
The app has said it would never share such data with Chinese authorities.
Sources told Reuters that ByteDance’s latest proposal would see Oracle become its technology partner and manage TikTok’s US user data.
It was not yet clear whether Mr Trump, who favours an American tech firm owning a majority of TikTok in the US, would approve the deal.
Oracle, whose chairman Larry Ellison is a supporter of the president, has significant technical expertise but no experience in running social media – instead dealing largely with corporate clients.
ByteDance, Oracle and the White House did not comment.
Walmart said it was still interested in investing and that it would talk further with ByteDance and other parties.